Kohl's, which like most of its competition has struggled to attract shoppers in recent years, is breaking a marketing campaign this week to tell consumers it is now selling Under Armour products in stores and online. Company representatives have called the biggest brand launch—in terms of product— in Kohl's history.
"We think there's such massive opportunity with Under Armour in categories like women's apparel, our children's apparel and footwear that they really could impact the overall business," said Kevin Mansell, chief executive of Kohl's, on a conference call earlier this month.
Product, spanning across categories including accessories, has already started to roll out in stores in recent weeks. Three 30-second TV broadcast spots will begin airing this week, and Kohl's is also planning a robust social media presence around the launch. The retailer, which spent $306.5 million on measured media in the U.S. in 2015 according to Ad Age's Datacenter, worked with agencies Anomaly and Huge on the campaign.
"The visual spots show intimate, real-life moments of an athletic start, but are representative of a major athletic achievement, recognizing that stepping up to the challenge, no matter the challenge, is a big deal," said Michelle Gass, chief merchandising and customer officer at Kohl's, via email. She noted that in the last 12 months, Kohl's has seen some 500,000 searches on its website for Under Armour."
Focusing on wellness is a smart strategy considering the category has already proved a significant boon for a struggling Kohl's. Last year, sales of active and wellness products grew by double-digits, and the chain has expanded its in-store active areas by as much as 30%, according to Mr. Mansell. Indeed, activity products and wellness, which is becoming a multi-billion-dollar category for Kohl's, now comprises more than 15% of the retailer's business, Ms. Gass noted.
Like Macy's and JC Penney, Kohl's has struggled to attract shoppers as it deals with digital competition from the likes of Amazon. Though the 1,100-unit chain has rolled out digital initiatives with its own loyalty payment system Kohl's Wallet, the brand saw declines over the critical holiday season. In the fourth quarter, same-store sales fell 2.2% and sales for the period were down 2.8% to $6.2 billion while net income fell 15% to $252 million.
The marketer recently announced it will trim costs by shrinking store sizes—it's currently testing a 35,000-square-foot format.
The deal could also provide a needed-boost to Under Armour, which after years of growth has faced recent declines. The brand saw revenue drop 12% to $1.31 billion in the fourth quarter, compared with the year-earlier period, its slowest growth in nearly a decade, according to reports. The company also has come under fire in recent weeks by its own spokespeople for controversial political comments made by Chief Executive Kevin Plank.
Even so, Under Armour is expected to help Kohl's attract a younger consumer who might otherwise have shopped elsewhere for the activewear brand, noted Tiffany Hogan, a senior analyst at Kantar Retail. The partnership is expected to make Kohl's more of a destination for wellness, she said.
Under Armour "could help aid them in making their sales stronger by having a new brand that's very popular," she added.
For its part, Under Armour stands to gain back some of the middle-market customers it lost with the bankruptcy of 450-unit chain Sports Authority last year.
"Kohl's represents an exciting retail partnership that allows us to connect with a broad base of consumers who are on health and fitness journeys to be their very best," said Adrienne Lofton, senior VP-global brand management, at Under Armour, via email. "With high nationwide demand for our brand with this loyal consumer at Kohl's, we're excited to deliver on their needs by providing an innovative portfolio of performance apparel, footwear, accessories and connected fitness products for the entire family."