Kohl’s Corp. announced this week that it is launching a pilot effort in 5-10 of its stores with fast-growing supermarket chain Aldi as part of its standard-to-small program. The company also said it is rolling out the standard-to-small strategy in an additional 200 stores in order to further inventory reduction and margin accretion.

Kevin Mansell, chairman, chief executive officer and president of Kohl’s, said during a quarterly earnings call that partnering with Aldi provides an opportunity to leverage Kohl's real estate and benefits “both the top line with increased traffic and the bottom line through expense offsets, both fixed and variable.”

Mansell explained that Kohl's is also open to partnership with other retailers as part of its goal to revamp 500 stores by the end of this year.

“In terms of where we see this going, I think we're focused on traffic-driving retailers with good, strong balance sheets and outlooks. So, certainly, the one that we're doing the pilots with falls into that category,” he said of the partnership with Aldi.

Mansell said the company is targeting retailers like groceries and supermarket chains “because they drive a lot of traffic.” However, he noted that there are other sectors that also may be good pairings.

“People in the fitness category, for instance, I think are a great combination with Kohl's, and there are many others, but it's traffic drivers -- strong brands, strong balance sheets -- where we know that we can coexist together for a long time,” he explained.

Mansell said Kohl's believes the concept is a “big idea” and one the company is uniquely positioned to execute.