The recent changes in American retail have seen Kohl make moves to change its business strategy. With the resulting decrease in traffic to retail stores, and Kohl’s ownership of many large stores, its financial capacity is rendering the firm unable to fill the shelves due to low patronage.
This change has presented lots of options to Kohl to put its large real estate to other uses. There are many people including some of its investors who believe if Kohl put up a piece of its huge commercial real estate for sale, the profits could soar. You could become a huge investor in Kohl’s expansive territory. View Kohl’s stores on the NNN Deal finder site for a list of available stores you could buy.
Business Strategies Employed By Kohl
Kohl, being aware of the impending crisis it faces, opened lots of smaller shops; inside their main stores, expanded the aisles as well as made drastic reductions to improve productivity and cut costs. These reductions included bringing in tenants to fill in the remaining open space in their store.
A major example of this is seen in Kohl’s partnership with the German grocery store Aldi and gym outfitPlanet Fitness to open stores in about 10 of Kohl’s vacant spaces. It is hoped that the deal will pressurise customers to make visits to Kohl’s grocery shop after their workout at the gym in the same location.
There has neer been a better time to take advantage of Kohl’s “black friday” store offers. Many of Kohl’s stores on the NNN Dealer Finder site are ridiculously affordable as compared to previous times.
Estimate of Kohl’s Real Estate Empire
It could be said that the total valuation of Kohl’s real estate isn’t what is reported. From previous financial reports, 35.3 percent of the firm’s total assets are 412 physical stores, with 13 out of the 14 distribution warehouses theirs.
Even though the value of the total assets stands at just above $7.4 billion, the value is worth more. All of the assets were acquired many years ago, with the value increasing as the years go. Many of the properties include the plant, factories, equipment and administrative buildings.
Analysts believe that if Kohl decides to monetise many of its properties on a sale-lease agreement or outright sale of some stores, its annual operating income could increase by at least 30 percent or higher.
We believe the current market capitalization estimation for all of Kohl’s real estate assets at $3 billion is not an accurate representation of the total value, even if most of these properties are valueless.
Why You Should Consider Buying Into Kohl’s Empire
There have been reports of plans by Kohl being put up for sale. The firm’s management was believed to have considered the possibility of putting up the company for a buyout led by the administration to private investors. This sale was considered when the company’s financials were in the clear, and the share price was double the current price.
Many private corporations were interested in the buyout at the time, including Sycamore Partners. They are drawn because of the cash flow churned out every month and the actual value of Kohl’s real estate.
Another big firm that may be in the race to buy out Kohl is Amazon. The benefits Amazon stands to gain from the purchase are enormous. Amazon could leverage its existing partnership with Kohl through its Returns program initiative to become the final buyer. The current collaboration was so successful that Kohl announced that it registered 2 million new customers in the last fiscal year in its quarterly reports.
A massive purchase of Kohl could see Amazon increase its territory in the consumer electronics, home, and apparel market to appeal to its prime and non-prime consumers. We could see a repeat of its boost when it purchased Whole Foods in 2017.
With Kohl’s strategic locations of its stores offline, Amazon could extend the reach of its private-label products alongside some of Kohl’s known products.
Another strategic partnership that may drive up Kohl’s value is its business understanding with Sephora to open up to 850 mini shops at its physical stores. Two hundred of the stores are expected to open in the coming season. Analysts believe this partnership is yet another genius attempt by Kohl to bring its customers back through its physical stores.
All these business deals are necessary and will help bring Kohl’s customers walking into the stores and will only drive its share price up.
Such companies and other big competitors may still be in the market to purchase the ownership status of Kohl. You could be a shareholder of the Kohl empire if you buy any of Kohl’s stores on the NNN Deal Finder site right now.
Will Kohl Be Looking to Sell?
Kohl might be taking time to consider its options before it begins the search for a new owner. The current share price is low, notwithstanding that the company has seen worst times at an alarming 75 percent below the price in the previous calendar year.
Will it be willing to sell? Yes. However, it only makes business sense that they will be looking to hold forte until at least the effects of the COVID-19 pandemic has passed and business conditions have begun to look favourable. .
Future Prospects
The question is no longer if Kohl’s real estate for sale is true or false, but when it will happen. The coronavirus pandemic may be a blessing in disguise, creating an environment where Kohl will put up some of its stores for sale, allowing individuals to get a piece of the Kohl business.
Analysts forecast a turn of events in the shares of Kohl fortunes, and by 2022, it could start paying off a massive chunk of its $3.5 billion debt. There is no better time to purchase one of Kohl’s stores on the NNN Deal Finder site and prepare for a good ROI next year.
