Kohl's to accept Amazon returns at some stores

MENOMEE FALLS, Wis. – If you can't beat 'em, join 'em.

That seems to be the strategy at Kohl's (KSS), which said Tuesday that it will start accepting returns for Amazon at some of its stores in Los Angeles and Chicago starting next month. The retailer is also opening Amazon shops at some of its locations.

Kohl's said will pack and ship eligible Amazon return items for free at the 82 stores offering the service. There will be designated parking spots near the Kohl's store entrances for those doing Amazon returns. While the service will allow Kohl's customers to skip their local post office for Amazon returns, it also gets them into Kohl's stores, where they might then shop.

Like other department stores, Kohl's is trying to come to grips with the growing popularity of online shopping and as Amazon turns its sights on new product categories. Lower-cost and mid-tier retailers such as Kohl's, J.C. Penney (JCP) and Dillard's could face significant pressure on their profit margins as Amazon dives deeper into the apparel market, analysts with credit rating agency Fitch said in a recent report.   

The department store had previously announced plans to open 1,000-square-foot Amazon boutiques in 10 of its stores in Chicago and Los Angeles that will sell Amazon Echos, Fire tablets and other gadgets.

Shoppers can also have an Amazon employee come to their home and install a device or suggest smart home products to buy. Best Buy recently launched a similar program, which sends its employees to customer's homes to recommend electronics.

Despite the growth of online shopping, most retail transactions still take place in physical stores. Analysts have said that being partners with Amazon will give Kohl's a way to differentiate itself from other department stores and lure shoppers looking to buy electronics. For Amazon, it gets its devices in front of more people to try them.

Earlier this year, the owner of Sears and Kmart said it would sell its Kenmore-branded appliances on Amazon.com for the first time.

Kohl's, which sells apparel, footwear, home accessories and other products, has roughly 1,150 stores across the U.S. It also operates about a dozen FILA outlets and a handful of Off-Aisle clearance centers.

Kohl's shares have slipped from nearly $80 in mid-2015 as its growth as slowed. The stock was 87 cents, or nearly 2 percent, to $45.74 in early afternoon trading.