Why Kohl's signed up for Weight Watchers

The two companies struck a partnership on Tuesday and announced plans to build a WW "studio" at a Kohl's store in Chicago.

Kohl's (KSS) has more than 1,100 stores around the country, but it's starting slow with WW (WTW), formerly Weight Watchers.

The 1,800-square-foot Chicago studio opens later this year and will host small groups for 30-minute "wellness workshops." Potential WW members can meet with coaches and learn about dieting.

As part of the deal, Kohl's will also sell WW-branded merchandise online and at select stores beginning in June, and Kohl's employees will get access to WW programs.

Turning to WW

Kohl's already shares a customer base with WW, and the tie-up will give WW members another reason to visit.

"We know the Kohl's customer is also our customer," WW CEO Mindy Grossman said in a news release.

The hope for Kohl's is that WW customers will stick around and buy Nike and Under Armour merchandise after their workshops. Kohl's could expand the studio to more stores if the Chicago pilot succeeds.

Kohl's CEO Michelle Gass has pursued creative partnerships to drive store traffic since she took over in 2018.

She formed a partnership with Amazon to offer customers free returns at around 100 stores and opened Amazon (AMZN) mini-shops at 30 stores to sell Echo Dot and other smart devices.

That relationship has worked. "We're really pleased with the pilot," Gass said in November. "Customers love it."

A health 'authority'

Kohl's latest move fits directly into its strategy to establish itself as a hub for health and wellness brands.

Becoming "an authority" in health and wellness will help it stand out from department store rivals, said Christina Boni, retail analyst at Moody's.

Under Gass, Kohl's has focused more on selling workout and athleisure brands.

Kohl's already has partnerships with brands like Nike, Adidas, and Under Armour, and its "active" business made up 20% of sales in 2018. The company has started to sell Fitbit and Apple watches and partnered with brands like Vitamix and Sleepwell, too.

As part of Kohl's efforts to become a leading active and wellness retailer, it is testing expanded floor space for top athletic brands at 30 stores.

"Active is here to stay. It's part of people's lifestyles. People are wearing active to work out. They're also wearing it to run to the supermarket or the coffee shop," Gass told analysts in November.

In the release Tuesday, she said Kohl's was looking for new ideas that "support our customers' health goals."

Kohl's is experimenting with shrinking the size of a handful of stores and leasing out the extra space to retailers.

So bringing Planet Fitness or another gym next door to Kohl's could soon follow, analysts say.

Let's block ads! (Why?)