Seriously, someone please tell Kevin Mansell – Kohl's Corp.'s (NYSE: KSS) triple-threat chairman, president, and chief executive officer – that he's wrong, wrong, wrong.
While the rest of the bricks-and-mortar retailers in America are shedding stores as fast as they can (though not fast enough for some of them to beat debt collectors to bankruptcy court), Kohl's triple-threat-to-the-company is actually adding new old-fashioned physical stores to the mid-tier retailer's lineup.
Are 1,154 stores in 49 states not enough?
Maybe Mansell is trying to pick up some of the stores Macy's is closing… as well as Target, Wal-Mart, and JCPenney.
Hey, Kevin, I've got Eddie Lampert on the phone. He says he's got a few hundred Sears and Kmart stores he's looking to unload before Sears Holdings Corp. (Nasdaq: SHLD) declares bankruptcy. How many do you want?
In a desperate gambit to heat up Kohl's sales in the retail ice age, to escape what I'm calling an extinction-level event, the company's lead sled dog is dragging the retailer straight off of a cliff.
Why is he doing this, and what's going to happen to Kohl's? And, my favorite question, how much can you make off of his chilling move?
Kohl's Latest Big Mistakes
What's going on at Kohl's, besides a lot of delusion, is that sales are cratering at its physical stores.
Sure, the company beat its own knocked-down revenue projections for the fourth quarter of 2016. After guiding analysts' expectations down, such that the consensus for revenue was $6.0 billion, Kohl's trumpeted its beat in the fourth quarter. What was its revenue? A whopping $6.1 billion. Barely.
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The company wanted to impress anyone listening by saying its revenue was better than expected, thanks in part to progress in online sales.
They must have been good, because the so-called "beat" happened in spite of same-store sales declining 2.2% in Q4 (which, of course, included the all-important holiday shopping season).
But forget their beat. Revenue was actually down 2.8% versus a year ago.
And profits? "Ice cold" would be one way to describe the 15% tumble in quarterly profits. Again, might I remind you, that's during the holiday shopping season.
For the full year of 2016, Kohl's net fell almost 17.5%.
Yeah. Opening more stores is just what it needs.
Despite the cold wind blowing hard across the income statements and balance sheets of ALL America's bricks-and-mortar retailers, Kohl's is proud to announce the opening of nine new "small-format" stores, two "off/aisle" locations, and 12 "FILA" outlets.
"Sales results were weak for the quarter in total, driven by declines in brick-and-mortar traffic and offset somewhat by strength in online demand," Kevin Mansell said.
Gee, who would have ever figured that?
Kevin, pal, note to self: Kohl's same-store comps haven't been up much since 2010.
Of your more than 1,000 stores, 300 have between 35,000-55,000 square feet of space. Most of the rest have more than 80,000 to fill with the inventory that you're discounting more and more, while Macy's, JCPenney, Sears, Kmart, and the rest of your peers keep liquidating their inventory out of all the stores they're closing.
And if you think the Under Armour Inc. (NYSE: UAA) deal you made to become a leader in the "athleisure" space is going to drive traffic into your stores, think again. Athleisure, the market owned by Nike, Adidas, and Lululemon, isn't working out so well for them right now.
Oh, and Under Armour stock? I hope it's not a reflection of the prospects for your coveted deal with them because, Kevin, that would put your deal in the tank along with UAA's sales.
It's okay to be hopeful. I understand why you said, "In 2017, we will accelerate our focus on becoming the destination for active and wellness with the launch of Under Armour in early March."
Anything that warms your heart in the ice age is good for you. But it will be temporary.
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