Kohl's Corp. (Menomonee Falls, Wis.) reported a 48 percent increase in fiscal fourth-quarter income, its sales boosted by new stores opened under a plan to grow into a national chain over the next three years. While total sales in the quarter rose 38 percent, sales at stores open at least a year increased only 12.5 percent, reflecting the heavy contribution from newer stores.
The retailer opened 61 stores during the year, including entries into New York, New Jersey and Connecticut, giving it a total of 320 stores in 26 states. Last month, Kohl's agreed to buy former Bradlees stores in a move to further boost its position in the Northeast. Earlier this month, it opened its first store in the Atlanta market. However, ceo Larry Montgomery refuted rampant speculation that the company was about to buy some former Montgomery Ward stores. He called Kohl's interest in the real estate “minimal,” saying most of the buildings are too large. Instead, much of the retailer's expansion activities during 2001 and 2002 will concentrate on the Northeast and Texas. Sixty stores are expected to open in 2001, followed by 70 more in 2002. In 2003, Kohl's plans to expand into the Southwest, including Los Angeles.
Looking ahead, the company said it is aiming for 20 percent total sales growth and mid-single digit same-store sales growth.
Despite declining U.S. retail sales and consumer confidence, analysts expressed enthusiasm about Kohl's aggressive expansion plans. “In every retail environment, there will be retailers that gain share and retailers that lose share,” said retail analyst Shari Ebert of J.P. Morgan. “I think Kohl's has an opportunity here, to continue gaining share from traditional department stores and national chains.”