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Data: Coresight Research; Chart: Thomas Oide/Axios

Retailers are opening physical stores at the fastest pace since 2016 based on January data, according to Coresight Research.

From Jan. 1 to Jan. 28, new store openings for retailers rose 3% to 1,910, Coresight data show, compared to the year-ago period.

In that same period this year, there were 748 closures. (See more below.)

Why it matters: Stores are one of the main ways that brands fuel growth, which in turn drives valuations, and in turn, drives deals.

Catch up fast: LBOs of legacy brick-and-mortar retailers over the last 15 years were predicated on opening new stores.

But several factors, from the competition of e-commerce to the decline of the enclosed suburban mall, dealt blows to that investment thesis.

What's next: It's not just the usual suspects pouring concrete. Digitally native brands now see stores as essential.

Activewear brand Vuori plans to more than double its 13 locations. Parachute also plans to more than double its physical store count.  

Quick take: "Physical stores are still important, and this was recently noted by CEOs of several large retailers and brands at NRF," Deborah Weinswig, CEO of Coresight Research, said via email.

"The physical store is being re-purposed, it can be a fulfillment center, a last-mile solution, or a platform for purchase," she said.

"Retailers and brands are embracing the 'showroom persona' of a physical store, through which consumers enter, browse options and then ultimately make purchases online."

1 big thing: Open for business 

Kohl's went on the offensive this morning, announcing a poison pill and (finally) acknowledging that it has a financial team in place (Goldman Sachs, PJT) ahead of what may be both a proxy fight and bidding war.

Why it's the BFD: Kohl's poison pill, on the surface, is a defensive, anti-takeover move against agitating activists. In that same release, though, the $8.1 billion retailer says it's got Goldman engaging with "interested parties."

Catch up fast: Last month, Kohl's received a $9 billion takeover offer from Acacia Research Corp., backed by activist investor Starboard Value.

Details: The pill’s 10% threshold and the fact that it includes synthetics is considered a tougher-than-normal rights plan and will likely earn the ire of Starboard Value and the other activists involved. 

The bottom line: Activist investors, and the bidding parties (both announced and rumored), will not appreciate swallowing the pill news. But they will surely appreciate the Goldman engagement nod. 

2. The BFD: Kohl's throws kitchen sink at activists

Illustration of a pattern of kitchen sinks.

The number of permanent store closures in the aftermath of the holiday shopping season has plummeted, compared to the same period last year, as reported by Axios' Nathan Bomey.

Why it matters: The plunge comes at a time when many stores historically close up shop, indicating the holiday season buoyed a sector that was facing an existential crisis earlier in the pandemic.  

Retailers announced 742 store closures Jan. 1–28, down 65% from the same period in 2021, according to a Coresight Research report.

Yes, but: One reason for fewer closures in 2022 is that so many shops closed in 2020 and early 2021, with major bankruptcies including JCPenney, Neiman Marcus and Brooks Brothers.

Meanwhile, the data comes as e-commerce companies and online direct-to-consumer brands have launched brick-and-mortar store strategies.

Online eyeglass retailer Warby Parker has talked about opening 700 more physical stores in the coming years, while Amazon is launching its first-ever physical apparel store later this year in Los Angeles.

What we're watching: Whether the wave of store closures has truly slowed and whether retailers have found a new balance in their online and brick-and-mortar strategies. 

3. As for store closures...

A Warby Parker storefront in New York City. Photo: Alexi Rosenfeld/Getty Images

Cart, a Houston-based e-commerce-as-a-service startup, raised $240m in equity and debt funding led by Legacy Knight Capital Partners. http://axios.link/5AL3

Novi Connect, a Larkspur, Calif.-based B2B marketplace for sustainable ingredients and packaging, raised $40m in Series B funding. Tiger Global led, and was joined by insiders Defy.vc and Greylock. www.noviconnect.com

Nfinite, a New York-based visualization and e-commerce merchandising startup, raised $15m in Series A funding led by USVP. www.nfinite.app

Dividend Restaurant Group acquired Eddie Merlot's, a chain of 13 upscale steakhouses. www.eddiemerlots.com

AS Beauty, a New York-based beauty group, acquired color cosmetics brand CoverFX, whose products are formulated for skin issues and sensitives, for an undisclosed amount. www.asbeautyco.com

Shufersal, Israel’s largest supermarket chain, bought a 60% stake in Mini Line, an importer of consumer electrical goods, for $176m. www.shufersal.co

Waterdrop, an Austrian beverage startup, raised a 60m euro Series B led by Singapore-based Temasek. www.waterdrop.com

Pure Fishing, a portfolio company of Sycamore Partners, acquired Svendsen Sport, a European supplier of fishing tackle, for an undisclosed amount. www.purefishing.com

Global Partners, a Waltham, Mass.-based owner of gasoline stations and convenience stores, acquired Miller's Neighborhood Markets for an undisclosed amount. www.globalp.com

4. Retail transactions

Glen Walter joins Tropicana Brands Group, a joint venture between PAI Partners and PepsiCo, as CEO on March 2. He was previously president of North America at Mondelez International. www.tropicana.com

Allison Schulder joins bakery chain Sprinkles as CFO after serving as CFO of True Food Kitchen. www.truefoodkitchen.com

Donald Stack is now SVP of operations at Good Times Restaurants succeeding Scott Lefever, who is retiring. www.goodtimesrestaurants.com

Mendel Gniwisch is the new CEO of Stor.ai. He was previously EVP of business development at the digital commerce solutions provider. stor.ai

5. It's Personnel

Today's newsletter features bullish data on store openings and closings, and we've got a quick take on Kohl's news. 

Please remind your colleagues, friends and family to sign up for this daily note and the other Axios Pro newsletters. Click here to sign up. 

February 04, 2022

1 big thing: Open for business