Business & Real Estate

Rancho Cordova Kohl’s store to close as part of nationwide changes

FILE - In this Friday, Nov. 27, 2015, file photo, shoppers push a cart of items as they leave Kohl's in Corpus Christi, Texas. Kohl's plans to close 18 stores, while pursuing new store formats including a foray into the outlet arena as the department store chain reinvents itself, the company announced Thursday, Feb. 25, 2016.
FILE - In this Friday, Nov. 27, 2015, file photo, shoppers push a cart of items as they leave Kohl's in Corpus Christi, Texas. Kohl's plans to close 18 stores, while pursuing new store formats including a foray into the outlet arena as the department store chain reinvents itself, the company announced Thursday, Feb. 25, 2016. AP

A Rancho Cordova Kohl’s store will close as part of the department store chain’s nationwide changes to drive earnings.

The store at 11051 Olson Drive in Rancho Cordova is one of 18 underperforming outlets that will close as of June 19, according to a Kohl’s press release. The stores represent less than 1 percent of the company’s total sales.

Half of the stores that will close are in California, while others are in Florida, Georgia, Illinois, North Carolina, New Jersey and Wisconsin.

Employees at the closing stores will be offered the opportunity to work at nearby Kohl’s or accept a severance package. Kohl’s employs 80 to 100 workers at each store.

The company said it conducted a review of markets across the country, taking into account the amount of rent paid, operating expenses and how the customer base is evolving.

The Associated Press has reported that Kohl’s is pursuing new store formats, including a foray into the outlet arena as the department store chain reinvents itself.

The strategy comes as the chain, which operates more than 1,160 stores, issued a weak annual revenue forecast Feb. 25 after posting a 20 percent drop in fourth-quarter profits.

The closures, although small, mark a rare retreat for a company that has never closed multiple locations at one time, Kevin Mansell, chairman and CEO of Kohl’s, told investors on a conference call late last month. And the moves show challenges Kohl’s and other department stores face as they rethink the type of stores they roll out amid shifting shopping preferences.

Shoppers are still spending, but they’re being very selective about it, spending more on home improvement and restaurants and less on apparel. And when they do want to buy fashion, they’re spending more time in stores like T.J. Maxx to grab fat discounts.

Department stores are also feeling the heat from online retailer Amazon.com.

In a shifting retail environment, Kohl’s, Macy’s and other department stores are expanding online and launching their own off-price stores. Kohl’s said it is planning to add two more Off-Aisle pilot stores in Wisconsin. The retailer also plans to open seven small-format stores throughout the country, and it will test 11 outlet stores under the Fila brand.

Bill Lindelof: 916-321-1079, @Lindelofnews; The Associated Press contributed to this report.

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