Virginia Kohl's Stores May Be Acquired By Competitor: Report

VIRGINIA — Department store giant Kohl's has been offered an acquisition deal by retail competitor JCPenney for a hefty $8.6 billion, according to a New York Post report.

Simon Property and Brookfield Asset Management, both of which helped JCPenney out of bankruptcy in 2020, have reportedly offered $68 a share to acquire the Wisconsin-based retailer.

The JCPenney and Kohl's brands would remain separate, a source told The Post, with plans to streamline operations, merge IT systems and slash costs. All private apparel is set to be manufactured by the same label, according to the outlet.

There are 31 Kohl's locations in Virginia, and 16 JCPenney stores in the state. Neither chain has a store in the District of Columbia.

The bidders aim to cut $1 billion in costs over the next three years, per the report.

Last month Kohl’s said it planned to add Sephora mini-shops to about 75 percent of its 1,100 US stores, open 100 new locations at half the size of its traditional outlets in the next four years and increase its Kohl’s Cash rewards program from 5 percent to 7.5 percent on purchases, CNN reported.

Kohl’s has lost 17% of its market share since 2011 to discount retailers such as TJ Maxx, Amazon and rival clothing brands, UBS analyst Jay Sole told CNN.

If finalized, the sale would end plans to bring more Sephora locations inside Kohl's stores. It's not immediately clear what the fate of the already-existent Sephora counters will be.

The partnership with the beauty brand, which aimed to "draw new and younger customers" to Kohl's department stores, began in 2020. 850 Sephora stores inside Kohl's stores were planned to open by 2023.

Kohl’s put itself up for sale earlier this year following a push by activist investors Macellum and Engine Capital, who were unhappy with the chain's direction, FOX Business reported.

Other interested bidders have included Saks Fifth Avenue's parent company Hudson's Bay, as well as private equity firms Sycamore Partners and Leonard Green & Partners, according to the New York Post.

Goldman Sachs has reportedly been pitched to facilitate the potential sales process, the report said.