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Kohl's to close its discount stores after 4 years in operation

USA TODAY logo USA TODAY 6/12/2019 Rick Romell

MILWAUKEE – Kohl's will close its Off/Aisle stores, ending a four-year-old foray into discount retailing, the company told employees Tuesday.

The four Off/Aisle locations – three in Wisconsin and one in New Jersey – will close on Aug. 3, Jon Grosso, an executive vice president, said in a memo to staff.

Grosso's message suggested that the discount outlets are being shuttered not because they were unsuccessful, but because improved inventory management at regular Kohl's department stores has left the firm unable to supply the Off/Aisles with enough merchandise. 

Off/Aisle was started in 2015 as an outlet to sell deeply discounted items customers had returned to Kohl's department stores.

"While we've learned a lot from the tests, we also learned that our strength and ongoing improvements in inventory management across the company do not allow us to appropriately stock Off/Aisle stores at scale," Gross wrote in the memo.

Related video: Sales drop at Kohl's, J.C. Penney (provided by Reuters)

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Employees at the stores can transfer to other Kohl's locations nearby, he said.

Later Tuesday, a Kohl's spokeswoman confirmed that the company was ending the Off/Aisle pilot.

Kohl's positioned Off/Aisle as an experiment, one of many the Menomonee Falls-based firm has tried as it seeks to chart a course in a highly competitive and rapidly changing retail environment.

Off/Aisle was launched as the position of traditional retailers such as Kohl's was being undercut both by digital giant Amazon and the strong growth of off-price retailers such as TJX Companies Inc. – operator of TJ Maxx and Marshall's – and Ross Stores Inc.

Macy's also jumped into the discounting game, opening the Macy's Backstage stores within its regular department stores. At upscale Nordstrom, meanwhile, the off-price Nordstrom Rack wing has become increasingly important.


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