Kohl’s may be the next middle market retailer to take on Manhattan.
This story first appeared in the August 19, 2009 issue of WWD. Subscribe Today.
Retail real estate sources said Tuesday that Menomonee Falls, Wis.-based Kohl’s Corp. has been eagerly eyeing the Times Square and Columbus Circle neighborhoods, and is anxious to follow on the heels of one of its primary competitors — J.C. Penney Co. Inc.
The company also was said to have explored the Herald Square vicinity, but seems to be focusing further uptown.
Penney’s opened its first Manhattan store on July 31 in Herald Square on 33rd Street in a bold move to bring its value fashion formula to a location a block away from Macy’s.
Responding to the reports, Vicki Shamion, Kohl’s vice president of public relations, said, “At this time, we’ve not announced any plans to open a new store in New York City.” She added, “At any given time, Kohl’s is reviewing multiple sites in communities nationwide. We do not comment on real estate speculation.”
But sources said Kohl’s has been checking out space on 57th Street between 8th Avenue and Broadway near the Hearst Corp. headquarters, including 251 West 57th Street. There are also various spaces available in the Times Square area, including at 1466 Broadway, 1540 Broadway and 711 Seventh Avenue. However, they are significantly smaller than typical Kohl’s stores, which tend to contain 80,000 to 90,000 gross square feet. Nearby to these sites, Forever 21 is taking over most of the former Virgin Megastore space in Times Square, approximately 60,000 square feet, and is expected to open early or in the spring of next year.
It’s not easy for bigger retail boxes to find space in the heart of urban areas that approximate the format and suits the economics. Plenty of retailers have looked at Manhattan only to fail to find a suitable site. Just ask Nordstrom, which has been eyeing Manhattan locations for years and instead had to settle for opening a Nordstrom Rack outlet store in the former Virgin Megastore on Union Square. Nordstrom continues to seek a location for a full-line store, however.
For Kohl’s, a move into Manhattan would be a logical next step considering in the past few years it has opened units in three of the four other boroughs, in Brooklyn on Bay Parkway, on Staten Island on Forest Avenue and in Queens in Fresh Meadows on 188th Street. The company also has store in Yonkers on Central Park Avenue, and several in New Jersey close to Manhattan. Kohl’s generally opens units in strip malls or neighborhood centers situated between downtown urban areas and major suburban malls.
Kohl’s would like the media attention and exposure a Manhattan location would bring. It would also bring the business closer to the heart of the fashion industry. Kohl’s did show an appetite for Manhattan by once putting up a splashy billboard in Times Square to promote its Simply Vera line, designed by Vera Wang. The store also has exclusive collections from Polo Ralph Lauren’s Chaps, Daisy Fuentes and Dana Buchman.
The chain has momentum, continuing to opportunistically open doors at a healthy pace, seizing locations vacated by other retailers and pushing its strong value proposition to more and more communities.
“We believe there will continue to be more consolidation, which may open up more real estate opportunities, and our balance sheet and cash flow will allow us to act aggressively if that happens,” Kevin Mansell, president and chief executive officer, said on a conference call last week.
In September, the 1,022-door chain will open 37 stores, mostly in former Mervyns locations. By the end of October, more than one-third of the chain will be new or remodeled over the last three years. Current plans for next year include another 20 to 25 new stores.