# Rhone, Crocs, and Kohl's Report Physical Store Expansion Plans for 2027 Despite E-Commerce Dominance

*Five major brands confirmed increased brick-and-mortar capital allocation, signaling a strategic shift in retail distribution.*

By **Jenny Huang Goodman MPA MSc MHSA, Principal** — The Stash Edge, Hako Shikin LLC.
Published 2026-10-15.

Canonical: https://www.pops4.com/stash/articles/rhone-anthropologie-kohls-brunt-crocs-2026-10-15t00-6
Subject: Rhone, Anthropologie, Kohl's, Brunt, Crocs
Tags: brick-and-mortar, retail expansion, customer acquisition, margin recapture, physical retail, owned channel

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Executives from Rhone, Anthropologie, Kohl's, Brunt, and Crocs told Modern Retail they are increasing capital investment in physical retail locations through 2027, reversing years of contraction in brick-and-mortar strategy. The coordinated shift suggests brands see persistent value in owned shelf space even as digital channels command majority budgets.

The move tracks with broader retailer behavior: brands are opening new stores, expanding existing footprints, or renegotiating lease terms to secure long-term presence. According to Modern Retail, the investment extends beyond flagship locations to include regional formats and test concepts, indicating confidence in physical distribution as a margin-accretive channel rather than a brand exercise alone.

The underlying mechanism is channel control and margin recapture. Wholesale partners take **25-50%** of wholesale price depending on category, and third-party marketplaces extract **8-15%** in fees plus advertising cost to remain visible. A brand-owned store converts at the full retail price and builds a direct customer file without platform intermediation. The unit economics improve further when the store also functions as a local fulfillment node, cutting last-mile shipping cost and enabling same-day pickup that reduces cart abandonment.

The second driver is customer acquisition cost arbitrage. Paid social and search costs have risen steadily, and a physical store in a high-traffic location functions as unpaid media. A customer walking past a storefront three times per week sees the brand **156 times per year** without any impression cost. Once inside, conversion rates run **20-40%** higher than e-commerce because the product is tangible and the transaction is immediate. The store also captures walk-in traffic that never would have searched the brand online, expanding the addressable base without bidding against competitors in auction.

For a small physical-product brand, the playbook starts with a test format that limits capital risk. Identify a **200-400 square foot** retail space in a neighborhood with demographic overlap to your existing customer file. Negotiate a short-term lease or a revenue-share deal with the landlord to minimize fixed cost. Stock the space with your top **6-12 SKUs** by revenue, displayed in a way that communicates the brand clearly. Hire part-time staff or run it yourself on a limited schedule, starting with **Thursday-Sunday** to capture weekend traffic. Track daily revenue, customer count, and average transaction size. If the space generates **$8,000-12,000** per month in revenue with a **40%+ gross margin**, the unit covers rent and labor and builds a direct customer list. Scale by opening a second location in a similar neighborhood or expanding hours before increasing footprint.

The broader pattern is that physical retail is no longer a defensive play or a brand marketing expense. It is a customer acquisition channel with measurable return and a margin structure that improves as digital acquisition costs rise. Brands that treated stores as legacy distribution are now treating them as owned media with built-in conversion, and the capital is following that logic.

## The takeaway

Physical stores now function as owned media and fulfillment nodes, capturing margin and customers that digital channels cannot reach profitably.

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## Publisher

**Hako Shikin LLC** — Virginia Beach, Virginia. Founded 1997. ASI 217876 · DUNS 18-204-6339.
Principal and author: **Jenny Huang Goodman MPA MSc MHSA**.

- Author: https://www.huanggoodman.com/about
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