Kohl's 1998 Annual Report Download - page 5

Stores through 1998
Existing States
1999 Expansion States
2000 Expansion States
Opening this many new stores is a major undertaking, involving a
multitude of details from advertising to staffing to merchandising.
A number of new initiatives are under way to continue to streamline
the opening process to reduce costs and increase efficiency.
Supporting Our Growth
The expansion of our Winchester, Virginia, distribution center will be
completed in 1999, enabling the center to service up to 100 stores in
seven states. And, construction has begun on our fourth distribution
center, an all-new, 542,000-square foot facility in Blue Springs,
Missouri, which will open by Spring 2000. This new distribution
center will support our stores in the states of Kansas, Nebraska,
Colorado, Missouri and Texas, ultimately serving up to 100 stores.
Exploiting our supply chain opportunities is one of the keys to sup-
porting our rapid growth. As we continue to grow, we are realign-
ing our planning and allocation function to meet customer needs
in a variety of markets and climates. By integrating our organiza-
tional strategies with technology enhancements we are realizing a
wealth of efficiencies in our supply chain as well as ensuring that
our customers always find the items
they need and the value they demand.
At the same time, we are tying together
the technology of our merchandising, planning and allocation,
logistics and distribution functions. Examples of this include our
comprehensive planning and allocation system to facilitate plan-
ning for inventory, forecasting with vendors, allocation of seasonal
merchandise and continued replenishment of our stock of basic
items.
Another example of our effective use of technology is our mer-
chandise and customer data warehouses. The data warehouses
include detailed, historical information on sales transactions,
inventory position, customer purchases, promotional results and
more. With this information we continue to increase the accuracy
of planning and allocation of merchandise. We can also study cus-
tomer purchasing information to develop and evaluate direct mar-
keting programs. With so much important data, the possibilities
are endless. All of this ultimately results in the value we pass
along to our customers.
The biggest indicator that Kohl’s is on the move is
our phenomenal growth. New store openings,
expansion into new markets, distribution center
construction, remodeling initiatives and operational
innovations have not only shaped our tremendous
growth, they have established Kohl's as a success-
ful leader among our nation’s retailers.
Our growth strategy is aggressive but disciplined.
We focus on new markets that are a logical expansion of our
existing markets as well as growth in contiguous markets and
fill-ins in existing markets.
New store openings are the driving force behind our steady growth
in sales and earnings. New stores typically experience low dou-
ble-digit increases in comparable store sales in years two
through four of operation. Due to our fast-paced growth, currently
about 40 percent of our comparable stores fall into this category.
In 1999, we plan to open 40-45 stores. Our success in every
market we’ve entered gives us confidence as we expand into
three new markets. We will open six stores in the Denver area,
six stores in the St. Louis market and 10-13 stores in Dallas/Ft.
Worth. Existing markets that will see new Kohl's stores in 1999
include: Washington DC, Chicago, Detroit, Philadelphia, Omaha,
Lexington, Richmond and Indianapolis.
Maintaining Freshness
To ensure that our existing stores convey the same vitality and
excitement as our new stores, 10 stores were remodeled and
expanded in 1998 and more stores are scheduled for make-
overs in 1999. In addition, three stores were moved to new
locations in 1998 and two more are planned for relocation in
1999. As each store is remodeled, it is updated to reflect our lat-
est prototype design. In total, over 81 percent of our stores
were new or remodeled in the last five years.
In 2000, we plan to open 50-55 stores. This includes our entry
into the Northeast region, as we take over and renovate 33
stores previously operated by Caldor Corporation. These stores
are scheduled to be open in the first quarter of 2000.
Kohl’s is
Expanding into
the Northeast
In early 1999, Kohl’s
acquired the rights to
occupy 33 stores previ-
ously operated by
Caldor Corporation, a
Connecticut-based store
chain. This exciting new
expansion extends the
Kohl’s concept into the
New York and
Connecticut markets
and expands Kohl’s
presence in New Jersey
and Maryland.
This expansion also fits
right into our strategic
initiative of contiguous
expansion by building
on our successful entry
into the mid-Atlantic
region over the past
two years. With their
prime locations, these
new stores establish a
solid presence for Kohl’s
in the Northeast and
enable us to enter this
densely populated area
with a critical mass
of stores.
We’re expanding into new markets.
Construction of new stores, like this
store in Denver, is supported by
strategically located distribution cen-
ters that efficiently serve each area.
76
1
ND 13
MN
1
SD
3
NE
7
KS
4
IA
27
WI
33
IL
3
MO
16
MI
31
OH
3
KY
3
TN
9
VA
8
NC
17
PA
1
NY
6
NJ
2
DE
8
MD
2
WV
15
IN
CT