WOODLAND PARK, N.J. — Kohl’s is thinking small to rev up its sales.

The retailer is opening Babies R Us shops in its existing stores across the country starting this week, and plans to have 200 by the end of September. The shops will carry a variety of baby merchandise that the company hasn’t offered before, including shampoo, strollers and car seats. Kohl’s previously sold only baby clothing.

With the move, the Wisconsin-based retailer aims to cater more to young families, whether they’re decorating their homes, getting ready for back-to-school or preparing for a new addition. Most of the retailer’s approximately 1,170 stores are in strip malls in the suburbs, a short drive for busy parents who are running errands or shopping for groceries.

Along with the baby category, Kohl’s is also bulking up its assortment of home decor, gifting and impulse items. CEO Tom Kingsbury estimated in late May that those expanded categories, including Babies R Us, are “a $2 billion-plus sales opportunity” in the coming years.

Yet U.S. demographics aren’t tipped in Kohl’s favor. Births in the U.S. totaled 3.59 million last year, according to provisional data from the U.S. National Center for Health Statistics. That’s the lowest number of births in more than 40 years.

On a store tour in New Jersey on Wednesday, Chief Merchandising Officer Nick Jones showed off the first Babies R Us shop. Customers who walk through the location can see and feel many pricier items, such as strollers, cribs, and high chairs, outside of the cardboard box. The shops include many prominent baby brands, including Hatch, Frida, Graco and Baby Bjorn.

Over the past few weeks, online shoppers have also seen Babies R Us on Kohl’s website. Its website has twice as much merchandise as the approximately 800 to 1,000 items available in most shops, the company said. Kohl’s will also launch a baby registry in the fall.

Each shop will range in size, but will be set up next to the baby and kid’s clothing that’s currently in all stores. Jones said more merchandise is on the way for expecting families, too, including baby apparel from Nike. It is introducing maternity clothing from Motherhood, a direct-to-consumer brand, which will be exclusive to Kohl’s stores.

The retailer is rolling out Babies R Us shops at a time when it needs growth drivers. Kohl’s net sales totaled $16.6 billion in the most recent fiscal year, which ended in early February. That’s a nearly 14% drop from five years ago.

Kohl’s expects current full-year net sales to decline between 2% and 4%. It posted a surprise net loss of $27 million for the fiscal first quarter and lowered its full-year forecast in late May.

Kohl’s shares are down 24% this year, trailing the S&P 500’s nearly 16% gains during the same period.

Like other retailers, Kohl’s has contended with shoppers who are putting off discretionary purchases while spending more on everyday expenses like groceries and housing. Yet Kohl’s challenges go beyond that, according to Dana Telsey, CEO and chief research officer of Telsey Advisory Group. She said it needs to sharpen its merchandise to grab the attention of new and existing customers.

“There’s been so much competition from others out there,” she said. “A brand has to stand for something and matter.”

He noted the U.S. Census Bureau has found that the median age of U.S. women giving birth is 30 years old.

“People are in a much different life stage at that point,” he said. “They’re older. They’re more established in their careers. They’re more likely to own a home. They have more disposable income. And those have greater influence on the things that they might choose to bring into those homes.”

Hinz said the market has remained stable, despite the lower birth rate, as parents spring for fancier items like natural wood cribs and car seats that rotate to make it easier to get a baby in and out. And families will stretch their budgets to support a child’s health and safety even during tougher economic times, he said.

Plus, new parents have more retailers and brands to choose from and new ways of registering for baby items. Big-box chains Target and Walmart have expanded their baby departments. Macy’s launched its own baby registry in late April. And universal registries, such as Zola and Babylist, have gained popularity by allowing customers to choose items across retailers’ and brands’ websites.

In an interview with CNBC in March, Kingsbury said there’s market share up for grabs in the category. He referred to the bankruptcy and store closures of Bed Bath and Beyond, the parent of Buy Buy Baby.

And, he said, customers who shop at Babies R Us will also buy items in other departments.

Kohl’s is making a similar move to what it’s done with Sephora beauty shops, which it is opening in all of its stores. On earnings calls, Kohl’s leaders have said the shops are drawing younger and more diverse customers.

Jones said Kohl’s will decide whether to open Babies R Us in more stores after learning from the first 200 shops.

As it relaunches Babies R Us, Kohl’s will test whether the brand has remained relevant or grown stale.

The brands of Babies R Us and its former parent Toys R Us are now owned by WHP Global, a New York City-based brand management company. The firm has bought and tried to rebuild other brands including Bonobos, Rag & Bone and Isaac Mizrahi. Toys R Us shuttered its stores after filing for bankruptcy in 2017.

Kohl’s and WHP Global, which announced the deal in March, have not disclosed the financial terms of the agreement.