What Goes Up . . .

The slump at The Gap (San Francisco) continued through the third quarter 2001. For the three months ending November 3, the specialty apparel retailer reported a loss of $179 million and same-store sales declines of 17 percent.

On the other hand, Kohl's Corp. (Menomonee Falls, Wis.), can seem to do no wrong. At a time when much of the retail industry is struggling, the specialty department store retailer reported a 31 percent increase in third-quarter earnings and sales gains of 22 percent.

“Obviously, we're very pleased with the quarter and the year-to-date, relative to the competition and given current market conditions,” said president Kevin Mansell, who attributed the earnings growth to increased sales of higher-margin items, like women's apparel and accessories, as well as to inventory management systems that enable the company to put merchandise in stores where it will sell the best. The result, he noted, is that there is less need to mark down merchandise at clearance sales.

Last month, Kohl's led the industry with a 13.5 percent same-store sales increase, double that of Wal-Mart. Mansell said he expects a 16 percent increase in fourth-quarter sales, but a flat gross margin.

Kohl's operates about 380 department stores, primarily in the Midwest and the Mid-Atlantic, and it continues to grow in those areas while expanding into new markets. Targeting middle-income customers with housewares, apparel, shoes, and accessories for families, Kohl's believes its narrow brand offerings per category that simplify shopping and centrally located cash registers that expedite checkout and keep staff costs down are among the keys to its success.