Kohl's and Sephora Announce Long-Term Partnership

Earlier this week, Kohl’s and Sephora announced a long-term strategic partnership. This collaboration is to create a new era of elevated Beauty at Kohl's, which will connect Kohl's expansive customer reach and omnichannel convenience with Sephora's quality service, product selection and exceptional beauty experience.

According to a Kohl's press release, the partnership will be called "Sephora at Kohl's" and it will be a fully immersive, premium beauty destination. The 2,500 square foot space will be showcased at the front of the store, and when the first 200 locations open in fall 2021, the Kohls.com online beauty selection will also convert to offer an expanded assortment of Sephora's products. By 2023, Sephora at Kohl's will expand into at least 850 store locations.

Michelle Gass, CEO of Kohl's, told CNBC in an interview this week that the department store chain has had its sights set on beauty for some time.

"With all the disruption that's happening in the retail industry, we’ve really taken a step back and asserted a new strategy to be the destination for all things active, casual, wellness and beauty for the family," Gass said. "So, we're going to be making certain categories like active and athleisure, and beauty, of course, much bigger and then downsizing or exiting other categories. [...] Kohl's, as big as we are, we're very underrepresented in beauty, yet we serve 65 million customers, 70 percent which are female, and they've been telling us they want a bigger, bolder experience in beauty."

This isn't the first time Sephora has partnered with a large retail chain. In 2006, the beauty company collaborated with J.C. Penney. Jean-André Rougeot, Sephora Americas CEO, explained why Kohl's was the obvious choice for the beauty retailer's next partner.

"We obviously have a very large .com presence," Rougeot said. "Our problem is reach. We have only 500 stores, and most of them are in urban centers or traditional malls. We haven't been able to reach consumers in American suburbia. [...] The reason this deal is so great is that we're going to be able to leverage the extensive network of Kohl’s, but more importantly, the fact that its locations are so convenient, you know, off-malls, easy to park, easy to access, that's going to be a blessing for consumers to be able to discover Sephora beauty in an easy and convenient way right next to where they live."

Total Retail's Take: Opening up mini-Sephora shops in Kohl's locations could be a win-win for both companies. Almost three-quarters of Kohl's customers are women, and they've been asking the department store to offer more beauty products. As Rougeot mentioned, Kohl's customers may be discovering Sephora for the first time through this partnership. 'Sephora at Kohl's' will allow more suburban consumers to shop the beauty brand. This agreement will replace the partnership Sephora had with J.C. Penney, and is similar to the announcement Ulta and Target made earlier this month about their plans to open makeup and skincare shops inside hundreds of Target stores. Overall, this move may also allow Kohl's to cater to a younger audience. And it further speaks to the growth opportunity that brands and retailers foresee for the beauty category, both in-store and online.