What's Actually Happening With Kohl's Store Closures
Kohl's has been closing underperforming stores in waves for the past few years, and the pattern is more strategic than most people realize. As of 2024 and rolling into 2025, they've shuttered well over a hundred locations. The math behind it is straightforward but not comfortable for anyone working inside those stores. Sales per square foot have been declining across the traditional department store segment. Kohl's specifically pulls in roughly $30 to $35 per square foot, which is well below the $50 to $60 range that makes a location viable in today's environment. When a store can't clear that threshold after accounting for rent, labor, utilities, and shrink, the corporate calculus says close it. They've been doing this quietly since around 2019, accelerating during and after the pandemic, and continuing through the current quarter.
The Kohls Closure Conundrum Whats Behind The Retailers Store Closing Strategy
Here's what most people miss about the strategy. Kohl's isn't just closing bad stores randomly. They're consolidating into markets where they already have strong traffic and letting markets with weak brand awareness go. You'll notice that the closures heavily target smaller Midwest and rural locations while stores in major metro areas or trade-area trade-in markets tend to stay open. That's not accidental. It's a deliberate portfolio optimization move. The Amazon partnership is the other half of this equation. Kohl's started accepting Amazon returns in-store around 2019, and that program drove meaningful foot traffic to locations that otherwise would've been hollowed out. In some markets, the return traffic accounts for nearly a quarter of all store visitors. But returns are low-margin business. You can't run a profitable store on return traffic alone, which is why they still close locations even with that program running. It delays closures but doesn't prevent them entirely. I worked with a regional manager going through a store closure review back in 2022, and here's what I learned that nobody puts in press releases. The decision isn't made purely on profitability. It's also about lease structure. Some of the stores being closed actually had positive cash flow, but the leases were up for renewal at that point. The landlord wanted a 40 percent rent increase. When you factor in that kind of escalation, the store goes negative fast. Those are the ones that die first, not the ones losing the most money right now. It's a lease math problem, not just a sales problem.
Another thing that trips people up is the anchor tenant relationship. A lot of Kohl's locations sit inside shopping centers alongside JCPenney, Target, or smaller grocers. When one major anchor leaves, foot traffic drops across the whole property, and that creates a domino effect. Kohl's closing can trigger other tenants to consider their own exits, which then makes the remaining business worse for whoever's left. It's a negative feedback loop that happens faster than anyone inside the store notices. There's also the labor angle that doesn't get discussed much. Kohl's has been struggling to staff locations at pre-pandemic levels, particularly in the markets where they're keeping stores open. Paradoxically, the closures sometimes make the remaining stores harder to run because you're moving employees from closed locations into nearby open ones, and the commute distances change, turnover increases, and you lose institutional knowledge about those markets. I watched a district manager try to consolidate three closing stores into two open ones and end up with understaffed shifts at both locations because the employees couldn't agree on new schedules. That's the operational reality behind the clean headlines about store closings. The brand positioning is shifting too. Kohl's has been trying to move upmarket slightly with better private labels and home goods, which means the younger, value-driven customer base that used to shop there exclusively is drifting toward Ross, TJ Maxx, or online alternatives. This isn't a new problem, but it's accelerating, and it means the remaining stores need to pull harder per location to justify their existence. That's why you see fewer Kohl's card promotions and more focus on the Cassie Campbell line and other exclusives. They're trying to create reasons for people to come in that can't be replicated online.
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If you're looking at this from an employment perspective, the warning signs are usually visible about six to eighteen months before a closure. Store traffic reports start trending down at the district level. Hiring freezes appear. Maintenance requests get deferred. The merchandise mix gets reduced to the core categories. If you're in a store where the floor space for seasonal departments keeps getting cut, that's often the early signal. Not every sign means closure, but the pattern tends to repeat itself across the portfolio. For anyone trying to navigate these closures, whether as an employee, a vendor, or a commercial landlord, the useful metric is sales density relative to the lease terms. A store making decent total sales but paying above-market rent is closer to closure than a store making slightly less in absolute dollars with a favorable long-term lease. The numbers on a P&L statement tell one story. The lease agreement tells the real one.
