Kohl's (KSS) Rallies on New 'Store-In-Store' Partnership with Amazon

On Wednesday, shares of department store Kohl's Corp. KSS are rallying, up about 4.7% in afternoon trading after the company announced a new partnership with e-commerce giant AMZN .

Kohl's will open 1,000-square feet Amazon areas in 10 of its stores, offering popular devices like the Amazon Echo smart speaker and the Fire tablet. Called the Amazon Smart Home Experience, the new "store-in-store" concept will start appearing in Kohl's locations in the Los Angeles and Chicago areas next month.

Kohl's joins fellow retailers Best Buy BBY and Sears SHLD who have chosen to collaborate with the online behemoth, in addition to tech company Microsoft Corp. MSFT . Best Buy is similarly creating in-store Amazon concepts, and Sears recently said it will sell Kenmore appliances on Meanwhile, Microsoft's Cortana and Amazon's Alexa are collaborating in a new voice assistant alliance.

"We are thrilled to offer a unique new way for customers to try out our lineup of Alexa-enabled Amazon devices, learn more about our smart home services from Amazon experts and then buy those items directly from Amazon - all within Kohl's stores," said Dave Zimmer, vice president of sales and marketing for Amazon Devices, in a statement.

While this is clearly a smart move on Kohl's part, especially if this turns into a broader rollout to the company's roughly 1,160 stores, but it also benefits Amazon. Amazon has been opening a number of its own brick-and-mortar stores, mainly bookstores , but this partnership is way to sidestep those huge building costs; the company also completed its acquisition of Whole Foods last week, another retail space in which Amazon can sell its Echo devices.

Amazon isn't the first tech company Kohl's has struck a deal with. Last year, it teamed with Apple AAPL to create small shops within its stores. Kohl's has suffered through six straight quarters of sales declines, but its focus on electronics-and surprisingly, activewear; earlier this year, the company began selling Under Armour UAA product)-has helped the retailer stand out.

Kohl's sits at a #3 (Hold) on the Zacks Rank, and has lost almost 19% year-to-date.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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