With the success of the 850 Sephora boutiques that will have been installed by the end of the third quarter of this year, Kohl’s management has now decided to complete installation of Sephora units in the rest of the company’s stores. 50 additional Sephora units with smaller footprints will be in smaller Kohl’s stores by the end of this year. That means there will be 900 Sephora units opening in Kohl’s this year.
All 1,100 Kohl’s stores will have Sephora beauty departments by the end of 2025. While the large Kohl’s stores will have 2,500 square foot units, smaller stores will have about 750 square feet devoted to Sephora. It makes sense. The company’s test of the smaller Sephora units already in place have had excellent results and this roll-out will give the beauty department a unified look throughout the company.
Earlier this year, Kohl’s tested the smaller concept. The test locations for the smaller Sephora’s units are in West Jordan, Utah, North Phoenix, Arizona, Lake Wales, Fla., Sussex, Wis., and Delavan, Wis. They have had some excellent sales results and that gave management confidence to roll-out the additional boutiques. The smaller shops will offer a curated assortment to fit local customers’ needs.
The partnership of Kohl’s and Sephora was signed in 2020. With that agreement, Kohl’s management committed to bring prestige beauty brands to neighborhoods across the U.S. The opening of Sephora in Kohl’s brings new, young customers who often are shopping more frequently. Beauty sales in the first quarter were up +150% year over year, and Kohl will continue to gain market share as more of the boutiques are opened in coming months.
Kohl’s efforts to attract younger customers are also reflected in its large scale back-to-school promotional effort. There will be events, prizes, and special sale events to attract customers.
POSTSCRIPT: The beauty assortment of Sephora that’s being added at Kohl’s gives new momentum to sales. The company projects that beauty will add $2 Billion to sales by 2025. That suggests many new customers will come to Kohl’s, and they are likely to shop for fashion merchandise as well. As construction of the new Sephora units in stores is completed, we should see an impact as early as this third quarter. An improvement in sales like what occurred in Q1, despite the inflation that has hindered many customers from shopping aggressively this year, will be a very welcomed sign.
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