Kohl’s plans to open 200 Babies R Us stores within its stores by the end of September, which will sell a variety of baby products, including strollers, car seats and cribs.
Provided by: Kohl’s
WOODLAND PARK, NJ — Coles I am thinking about starting a small business to increase my sales.
The company plans to open Babies”R”Us stores in existing stores nationwide starting this week, with the goal of increasing the number to 200 by the end of September. The stores will carry a variety of baby products that Kohl’s has not previously stocked, including shampoo, strollers and car seats. Kohl’s previously only sold baby clothes.
With the move, the Wisconsin-based retailer aims to better serve the needs of young families who are decorating their homes, preparing for the new school year or even preparing for the arrival of a new addition to their family. Most of the retailer’s roughly 1,170 stores are located in suburban shopping malls, within a short drive for busy parents running errands and grocery shopping.
In addition to baby products, Kohl’s is expanding its offerings into home decor, gifts and impulse items, and CEO Tom Kingsbury estimated in late May that these expanded categories, which include Babies R Us, represent “a $2 billion-plus sales opportunity” over the next few years.
But U.S. demographics are not in Kohl’s favor: There were 3.59 million births in the U.S. last year, according to preliminary data from the National Center for Health Statistics, the lowest number of births in more than 40 years.
Chief merchandising officer Nick Jones unveiled the first Babies R Us store during a tour of the store in New Jersey on Wednesday. Customers walking through the store can see and touch big-ticket items like strollers, cribs and high chairs outside of cardboard boxes. The store features many well-known baby brands, including Hutch, Frida, Graco and BabyBjorn.
Over the past few weeks, online shoppers have also seen Babies ‘R’ Us on Kohl’s Web site, which the company said offers twice as many products as the roughly 800 to 1,000 items sold in most of its stores. Kohl’s also plans to launch a baby registry in the fall.
The stores will vary in size, but will be located next to the baby and children’s clothing that is currently sold in all stores. Jones said there will also be more products aimed at expectant families, including baby clothes from Nike. The company is introducing maternity clothing from direct-to-consumer brand Motherhood, which will be sold exclusively in Kohl’s stores.
The Babies R Us stores are coming at a time when the company needs a growth driver: Kohl’s net sales were $16.6 billion in its most recent fiscal year, which ended in early February, down about 14% from five years ago.
Kohl’s expects net sales to fall 2% to 4% this fiscal year after the company lowered its full-year outlook in late May after reporting an unexpectedly widened first-quarter net loss to $27 million.
Kohl’s shares have fallen 24% this year, lagging the S&P 500’s roughly 16% gain over the same period.
Like other retailers, Kohl’s has been battling consumers who are putting off discretionary purchases while increasing everyday expenses like groceries and housing. But that’s not the only challenge for Kohl’s, according to Dana Telsey, CEO and chief research officer at Telsey Advisory Group. To attract new and existing customers, Kohl’s needs to sharpen its offerings, he said.
“There’s so much competition,” she says. “Your brand has to stand for something and have meaning.”
Inside Kohl’s Babies R Us stores, customers can touch and feel some of the big-ticket items on their shopping or registry lists.
Provided by: Kohl’s
Birth numbers have fallen, but luxury goods have increased
Kohl’s is beefing up its baby division as innovative products and luxury items like premium strollers drive spending.
Sales of baby products reached $7.5 billion in the 12 months ending in May, up 4% from the same period in 2020, according to Circana, a market research firm that tracks the industry. This includes a wide range of products such as car seats, strollers, baby bottles, bassinets, high chairs, cribs and feeding systems.
Steven Hintz, an industry adviser at Circana, which tracks baby-product sales, said spending was fueled by more customers willing to pay for premium baby products.
He noted that a U.S. Census Bureau study found that the average age for a woman to give birth in the United States is 30.
“At that point, people are at a very different stage in their lives,” he says. “They’re older, they’re more established in their careers, they’re more likely to own a home, they have more disposable income, and that really influences the choices they make about what they bring into their home.”
Hintz said the market remains stable despite the falling birth rate as parents spend on more premium items such as natural wood cribs and car seats that swivel to make it easier to get babies in and out. He also said that even in tough economic times, families will stretch their budgets to ensure the health and safety of their children.
Plus, new parents have more retailers and brands to choose from, and a new way to register for baby products. the goal and Walmart We have expanded our baby products section. Macy’s The company launched its own baby registry in late April, and universal registries like Zola and Babylist have become popular by allowing customers to select items from retailers or brand websites.
In a March interview with CNBC, Kingsbury said there’s room for a market share war in the space, pointing to the bankruptcy and store closures of Buy Buy Baby’s parent company, Bed Bath & Beyond.
Customers who shop at Babies R Us also will likely buy items in other departments, he said.
Kohl’s is following a similar move with Sephora Beauty Shops, opening similar stores across its stores, which Kohl’s executives said on the earnings call are attracting a younger, more diverse customer.
Jones said Kohl’s will wait and see how the first 200 stores perform before deciding whether to open Babies R Us in more stores.
Kohl’s will open Babies R Us stores next to its existing baby clothing lines and also add related products such as Nike baby clothes and Motherhood maternity clothing.
Provided by: Kohl’s
Does Babies R Us still have any relevance?
Kohl’s relaunch of Babies R Us will test whether the brand is still popular or has become stale.
Babies R Us and its former parent company, Toys R Us, are now owned by New York City-based brand management firm WHP Global, which has acquired and restructured other brands, including Bonobos, Rag & Bone, and Isaac Mizrahi. Toys R Us filed for bankruptcy in 2017 and closed its stores.
Kohl’s and WHP Global, which announced the deal in March, did not disclose financial terms of the agreement.
In addition to its deal with Kohl’s, WHP Holdings also has a deal with Macy’s, which has opened Toys R Us stores in many of its department stores.
Natalie Gordon, founder and CEO of Babylist, said Kohl’s move was risky because tastes have changed since the brand’s heyday in the ’80s and ’90s.
She said many retailers offer a poor customer experience with little opportunity to try out products, and the idea for Babylist came to her after she recalled the frustration she felt with retailers when she was preparing to give birth to her first child about 13 years ago.
“I felt like I was being infantilized by the brands out there,” she says. “They were pink and blue clothes with little cartoon characters. I’m a woman with a baby. It just didn’t resonate with me.”
The latest version of Kohl’s “Babies R Us” features the familiar brand font, but Kohl’s and WHP have given the brand a more modern look, said Christy Raymond, Kohl’s chief marketing officer.
“It’s reliable,” she said, “but it needed to be modernized.”
The store is decorated with fashionable baby photos rather than pastel colors and cartoon mascots like Toys R Us’ Jeffrey the Giraffe.
And Kohl’s plans to tap a marketing tool that didn’t exist in Babies-A-Rus’ heyday: partnering with influencers who will spread the word about the store on Instagram and TikTok.
