Department store chain Kohl’s Corp. plans to become the latest merchant to make a Chicago debut.
The expanding Menomonee Falls, Wis., retailer is close to finalizing negotiations for “a couple of locations” in the city, a real estate executive for the company said Tuesday.
If plans come to fruition, Kohl’s would join Target Corp., which recently opened its second store within the city limits, and Wal-Mart Stores Inc., which hopes to open one on the West Side in 2005. All are seeking to attract a new base of urban customers.
Kmart Corp. and Sears, Roebuck and Co. have long done business in Chicago, but a new generation of retailers, including Home Depot, is aggressively moving into cities to meet the needs of underserved urban consumers. That’s particularly important as suburban locations become oversaturated with stores and retailers need to look for alternative markets to sustain growth rates.
Kohl’s is “looking at more and more urban locations,” namely those with high concentrations of residents, said Patrick Peery, Kohl’s senior vice president of real estate. “You won’t find our stores in central business districts if the primary draw is work,” he said.
Peery’s remarks Tuesday came during a presentation at an event for the International Council of Shopping Centers. He declined to elaborate on the city sites and the timetable for opening the stores.
But real estate sources say Kohl’s is expected to sign a deal for a North Side site on Elston Avenue north of Armitage Avenue. The location was one of the proposed sites for furniture retailer Ikea, which ultimately decided not to come to the city.
On the South Side, Kohl’s is looking at a site on the west side of Damen Avenue south of the Stevenson Expressway, sources said. Last week, the city planning commission gave zoning approval to a development on the east side of the street that will be anchored by a Target store, a site rejected by Ikea.
Kohl’s had 542 stores at the end of 2003–including about 40 in the Chicago area, some just blocks from the city. It plans to open another 95 stores nationwide in 2004.
Until 2003, Kohl’s had been on a hot streak. But in eight of the 12 months last year, Kohl’s sales fell short of analysts’ expectations.
The cost of land acquisition, site work, construction and fixtures and equipment for a Kohl’s store typically run $10 million to $12 million, Peery said.
Specifically, in addition to land acquisition, site work costs $1.5 million a project, fixtures and equipment $2 million, and construction costs $45 a square foot. A typical Kohl’s store is 88,000 square feet.
On Monday, Kohl’s announced that it would open a store in DeKalb in March.
Peery also said Tuesday Kohl’s will debut in Florida in the “next couple of years” and will expand into the Pacific Northwest “in due time.”