While there is no certainty that Kohl’s will accept the offer, sources indicate that the two parties have met in the last few days to discuss a potential deal.
It also remains unclear how many of Kohl’s 1,100 store locations will be involved in a deal with Oak Street.
After talks between the two companies became public, Kohl’s shares rose by 9%, pushing the company’s market cap to nearly $4 billion. However, the company’s stock is down by about 43% this year.
The news comes nearly two months after a deal between Kohl’s and Franchise Group fell through, which led Kohl’s to express interest in monetizing its real estate portfolio.
While selling off its real estate would allow Kohl’s to cash out its equity, it would also saddle it with lease obligations as Oak Street will become its landlord, Reuters reported. Oak Street has already made similar deals with other retailers such as Bed Bath & Beyond and Big Lots Inc.
Last month, Kohl’s cut guidance for the year after it reported a 63% drop in net income for the quarter that ended on July 30, 2022.
