Kohl's is facing some problems, and in order to stay afloat, they are going to have to do some serious work. The retailer is planning on testing out smaller store options and getting into the outlet business.
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Around 18 underperforming stores are also set to close, but those won't be announced until the end of March. This will bring the total number of stores to just 1,164 stores in 49 states.
However, they are going to be replacing seven of those stores with smaller stores, and they will open at least a dozen outlet stores, a first for the company.
“We see exciting growth potential in the new stores and new formats that we are opening this year,” Kevin Mansell, Kohl’s chairman, president and CEO, said in a news release.
“While the decision to close stores is a difficult one, we evaluated all of the elements that contribute to making a store successful, and we were thoughtful and strategic in our approach.'
Kohl's reported on Thursday that their fourth quarter sales did increase, though slightly, but their net income decreased by 20% compared to last year. According to the Chicago Sun-Times, they "reported sales of $6.38 billion in the three months ended Jan. 30, up from $6.33 billion a year earlier. Net income was $296 million, or $1.58 per diluted share, down from $369 million, or $1.83 per share, a year earlier."
“I am particularly encouraged by the 4 percent increase [in same-store sales] we saw between Thanksgiving and Christmas,” Mansell said. “At the most competitive time in retail, customers were choosing Kohl’s.”
“This strength, however, was substantially offset by softness in early November and in January when demand for cold-weather goods was especially low, resulting in a quarterly comparable sales increase of 0.4%, which was below our expectations.”
The company reported sales of $19.2 billion for the year, up slightly from last year, but the net income was down.
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Kohl’s said it expects $825 million of capital expenditures this year.