Kohl's (KSS) stock plummeted 5.04% in pre-market trading on Friday following reports that the retailer is reducing the space allocated to Babies "R" Us in some of its locations. This move has raised concerns among investors about the future of the partnership between Kohl's and WHP Global, the owner of the Babies "R" Us brand.
According to a Bloomberg report, citing people familiar with the matter, Kohl's is cutting back on the Babies "R" Us presence in certain stores. This development comes less than a year after the partnership was announced, potentially signaling challenges in the collaboration. In response to the news, a Kohl's spokesperson stated that the company continues to "test and learn" to identify the right size, scale, and product assortment for the Babies "R" Us experience within their stores.
The market's negative reaction to this news reflects investor concerns about Kohl's strategy and its ability to leverage partnerships to drive foot traffic and sales. As the retail landscape remains competitive, any signs of scaling back on high-profile collaborations could be interpreted as a potential weakness. Investors will be closely watching for further developments and any impact on Kohl's financial performance in the coming quarters.
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