Amazon and Kohl's

While most of retail is rushing to figure out how to compete with Amazon, or just get out of the web giant’s way, Kohl’s Corp. has a different strategy — teaming up.

Kohl’s started accepting and processing Amazon returns at all of its stores last year. 

Michelle Gass, Kohl’s chief executive officer, told analysts in November: “The program is driving incremental traffic into our stores, and we are particularly encouraged by the disproportionate amount of new customers, which on average are also younger than the typical Kohl’s customer. We are very much looking forward to the holiday season, which will be the first with Amazon Returns in stores nationwide. The entire organization is focused on delivering exceptional customer service and ensuring that we are capitalizing on increased traffic.”

The link-up had some wondering if Amazon, which bought Whole Foods in 2017, was planning on expanding its big-box brick-and-mortar presence with a Kohl’s deal. 

That notion was only stoked by the the fact that Kohl’s issued Amazon warrants to buy up to 1.7 million of its shares, or 1.1 percent of the company. The warrants vest over five years, and could be put to use as early as Jan. 15.

But so far, the issuance is something of a moot point in the larger Amazon-Kohl’s story. 

The warrants allow Amazon to buy Kohl’s shares at $69.68 each — but the stock hasn’t traded that high since May and was trading in the $40s or low $50s during the December Christmas rush. 

But if all of those younger consumers who go to the store to return their Amazon packages become Kohl’s shoppers and supercharge the retailer’s business, propelling its stock price higher, those warrants will start to look better and some kind of a closer connection could become more likely. 

On the other hand, the arrangement might just help Amazon continue its online consumer takeover, making the already gigantic e-commerce player only larger and stronger. 

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