Kohl’s Comes up Smelling Like a Rose

Feb 06, 2002

Menomonee Falls, Wis.-based retail chain, Kohl’s, issued a press release begging
for help to open 13 brand-new Boston stores and hire on 1,700 employees. By year’s
end, the company plans to have 70 new stores nationwide — and while the company
is expanding, its earnings are growing. In 2000, the company opened 61 stores,
bringing total stores to 320, and simultaneously grew net income by 18 percent, to $372 million
from $258 million. The company’s merchandising strategy seems to be equally successful.
It stocks a few select national brands — such as Adidas, Nike, and Levi’s —
and carries only the top-selling items from each brand. During the third quarter,
a disappointing quarter for most retailers, the company saw net income rise 30.6

The fact that it’s growing at all right now and manageably so, is remarkable.
Its success sticks out in a landscape where Toys “R” Us is closing 37 Kids “R”
Us stores, 27 Toys “R” Us stores, and cutting 1,900 corporate jobs, Federated
Department Stores is closing two Macy’s stores, and Kmart is sure to close
locations to address its bankruptcy.

Moderator Comment: What makes Kohl’s successful?

If there ever was any doubt about Kohl’s abilities to
compete, they were lost a few years back when it acquired 33 stores from the
belly-up Caldor chain in the Northeast. At the time, many wondered why a midwestern-based
chain would enter a tough competitive market that already was over-stored.

As 20-20 hindsight shows, the chain not only made it
in the Caldor locations it then went on to buy another 12 store locations in
New Jersey and Massachusetts from Bradlees, which also went belly-up. Kohl’s
has national aspirations and its ability to grow even when the economy is not
suggests that something special is going on. Twenty years from now, will everyone
know Menomonee, Wis., in the same way we know Bentonville, Arkansas, today?
Anderson – Moderator

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