Kohl’s Corporation, headquartered in Menomonee Falls, Wisconsin, started with a unique business model: just the soft goods. It offered consumers a comfortable buying experience at lower-than-department store prices. Some people, especially Midwesterners, swore by the brand. My sister-in-law— born, raised, still living in Milwaukee, and likely never to leave — visits Kohl’s regularly for good deals and an easy shopping experience.

As it grew, Kohl’s extended its geographic reach to about 1,200 stores, creating a publicly traded stock that made for a good story until it wasn’t. Along the way, the company added more design-driven merchandise, deploying its design center located in the heart of NYC. Kohl’s became omnichannel, as all good retailers must. (Read this report on the retail industry.)

Kohl’s. Macy’s. JC Penny. Is there a difference? How can you win in an environment of too much retail for a population shifting from goods to experiences and electronics? Not easily, if at all.

I shopped at Macy’s yesterday for cologne no longer carried by Nordstrom’s, my go-to department store destination. I had not been in Macy’s for over a year. No wonder. Crowded aisles. Very few sales representatives (and those I did see absorbed in conversation with each other). “Sale” signs posted everywhere, with merchandise carelessly placed. Were refrigerators nearby, I would’ve sworn I was at Sears.

But on the margins, Macy has one difference. Macy’s has mastered marketing. Read a Macy’s catalogue and you might think you were looking at a Nordstrom’s catalogue. But walk into a Macy’s and experience the poor merchandise and service and the illusion disappears.

The difference between Kohl’s and JC Penny is that Kohl’s might become privately owned due to lackluster sales growth of late, little debt, and an attractive cash flow available to finance a leveraged buyout. JC Penny still has a stock story given its tumultuous fall under the Apple executive who thankfully exited his JC Penny CEO slot. Kohl’s appropriately worries about the arrival of activist take-over firms; Kohl’s board may therefore make a proactive move to privatize with investors of its selection.

Another option would be for Kohl’s to merge with JC Penny. The latter’s stores, I sense, are in different locations from Kohl’s (malls versus big box shopping areas). There would be considerable cost synergies. We’d also have one less retailer on the block competing on price, which would be good for the stores.

Another potential route to recovery and success for Kohl’s lies in Costco’s business model. Costco is, in essence, one huge co-op, focused on goods versus the credit union’s focus on finances. Costco generates its profit from customer membership fees, selling food and other products at an attractive discount and offering a highly regarded store brand (Kirkland).

In an era of commoditized clothes for the masses, could Kohl’s become Costco for soft goods? Why not? Kohl’s strong sense of community engagement supports this move. It certainly simplifies shopping for children’s gear and home goods for mid-income families: “We go to Kohl’s, kids. Period.” My guess is Kohl’s would steal a lot of market share from JC Penny.

Another route is to sell to Amazon, who will eventually be forced to be omnichannel to manage customer experience and shipping costs. Some big-box will sell out to Amazon. Why not Kohl’s?

Without some change like this, the most likely alternative for Kohl’s is bleak. Look for store closings across the country, significant cuts in headquarters staff, new wealth for private equity firms, and less wealth for Wisconsin.

Such is the nature of our economy today – differentiate or die, quickly or slowly, as all the value founders and associates created migrates elsewhere.  I’m rooting for Kohl’s to do something wild and different, whatever that is.

How about you?