Kohl's is putting a Weight Watchers studio in one of its stores as part of a wellness push

Key Points
  • Kohl's teams up with weight management company WW (formerly Weight Watchers International).
  • The retailer will open a WW-branded studio inside one of its stores in Chicago as a test.
  • Kohl's will also start selling WW merchandise in stores and online.
A Kohl's store in Jersey City, NJ.
Nicole O'Hara | CNBC

Kohl's is on a bit of a health kick.

The retailer announced plans Tuesday to team with WWthe newly rebranded Weight Watchers International — to test a series of wellness initiatives. The plans included a WW studio in a Kohl's store in Chicago.

The tie-up is another way Kohl's hopes to differentiate itself from its peers that are struggling to keep shoppers coming to their stores rather than shop online. Department store chains Macy's and J.C. Penney have already started 2019 on a sour note, reporting disappointing holiday sales. The bankruptcies of Sears and Bon-Ton are also hanging over the industry.

Kohl's, though, isn't afraid to make some bolder bets — with the goal of generating excitement around shopping at its stores. The company signed a deal in 2017 with Amazon in which it's been accepting Amazon returns and selling some of the e-commerce giant's Alexa-enabled devices at some of its stores. It's also been looking for new uses to take up space at some of its bigger stores and has started to divide certain locations for tenants like Aldi to move next door. It has also hinted at working with fitness gyms.

"As a destination for active and wellness for the entire family, we continue to seek out new ideas that support our customers' health goals," Kohl's CEO Michelle Gass said Tuesday in a statement.

In working with WW, Kohl's this year will test an 1,800-square-foot "community space" in a store in Chicago. The company said it will host WW workshops there for local WW members, in addition to allowing Kohl's employees and customers to use the area.

"We know the Kohl's customer is also our customer," WW CEO Mindy Grossman said about the collaboration.

In another alliance, Kohl's will start selling certain WW kitchen products in stores and online in June. The retailer also said Tuesday its employees will receive access to subsidized WW memberships.

Neither Gass nor Grossman wouldn't comment on the possibility of more WW studios coming to other Kohl's stores.

Kohl's has already been trying to establish itself as a destination for health and wellness gear. Last year, it started devoting more square footage in some stores for athletic apparel, saying that was helping lift sales. During its latest reported quarter, it said some of its top-selling brands included Under Armour and Nike. It also said FitBit devices were popular during the holidays.

Kohl's reports fourth-quarter and full-year earnings on March 5. Its shares are up just about 4.5 percent this year, less than the S&P 500 Retail ETF XRT's 5.5 percent rise.

WW, meanwhile, is set to report quarterly earnings on Feb. 26. The company known for its weight management programs has weathered threats over the decades from the likes of Jenny Craig, Nutrisystem and fad diets like Atkins. More recently, it's faced pressure from free apps like MyFitnessPal. Following its recent rebranding, though, WW is now trying to become more of a lifestyle platform.

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