Kohl's CEO said it has a big advantage because its stores are 'naturally built for social distancing' and mostly aren't in malls

• Kohl's says it has a handful of advantages over its competitors as it moves into the next phase of the pandemic era.
• One advantage is that the vast majority of its stores are located outside of malls.
• A second advantage is that Kohl's stores are spacious and "naturally built for social distancing," CEO Michelle Gass said in the retailer's first-quarter earnings call on Tuesday.

Kohl's is hoping that the location and size of its stores will help it succeed in the pandemic era.

During the department store's first-quarter earnings call on Tuesday, CEO Michelle Gass discussed how the chain's stores are going to operate in the future. About half of Kohl's stores have now reopened since temporarily closing in response to the pandemic in March.

In response to an analyst's question about potentially taking market share away from struggling competitors, Gass said that Kohl's has a couple of unique advantages.

One is that the vast majority of Kohl's stores are not located in a mall.

Kohl's stores are typically in suburban areas near where its target customers live and work, which Gass said is "really an advantage in a COVID or post-COVID environment where customers are not only looking for the convenience that that always offers, but a really safe environment."

Some department stores that are located primarily in malls have faced challenges in recent years as foot traffic to shopping centers has declined. JCPenney, for example, filed for bankruptcy on May 15, and a key part of the turnaround plan that Macy's unveiled in February was closing stores in underperforming malls.

According to its annual report filed with the Securities and Exchange Commission, Kohl's had 1,159 stores in 49 states as of February 1. Of those stores, only 62 were located in malls — 943 were in strip malls, and 154 were freestanding stores.

A second advantage, according to Gass, is the relatively large size of Kohl's stores. The average Kohl's store is about 80,000 square feet.

"Our stores are spacious, they're big, they're kind of naturally built for social distancing, and we've enhanced that further," she said.

She said that the retailer has made some changes to store layouts, including removing sections for impulse buys, in order to make more room for shoppers.

Reopened Kohl's stores are operating with reduced hours and limited registers, and they've implemented enhanced cleaning protocols, plexiglass at checkout, and signage that encourages social distancing. Kohl's said it is also requiring employees to participate in wellness checks and distributing PPE including masks and gloves.