Kohl's 2003 Annual Report Download - page 5

Expanding Profitably
Since becoming a public company in 1992, Kohl’s has been
focused on consistent expansion and earnings growth. Our
goal has been to increase both top-line sales and bottom-line
earnings 20% each year. The sales increase is a combination
of comparable store sales increases and square footage
expansion. We have been increasing square footage
approximately 20% a year and at the same time, building
the infrastructure required to support a national retailer.
Our 2003 expansion into the Southwest moved us from a
regional to a national retailer. We increased our store base from
457 to 542 stores in 2003, adding 85 new stores including
our entry into the greater Los Angeles area with 28 stores.
We further strengthened our presence in the Southwest with
our entries into Phoenix, Tucson, Flagstaff and Las Vegas.
At the same time, we opened additional stores in the regions
we had previously served.
In 2004, we will open approximately 95 new stores,
increasing square footage by approximately 18.5%. In 2005,
we plan to open another 95 new stores, increasing square
footage another 15%. We will expand our presence in the
Southwest, leveraging the infrastructure built to service this
new region in 2003. We will also continue to expand our
presence in our established markets. At this reduced rate
of square footage growth, we remain committed to
increasing earnings by 20% per year.
We have the infrastructure in place to support this growth.
Our distribution centers are strategically located to serve
our existing stores and accommodate future expansion.
Our systems for merchandise planning and allocation
enable us to get the right merchandise to the right stores
at the right time. We are experts at leveraging technology
to reduce operating costs, while at the same time increasing
store productivity and customer satisfaction.
As always, the secret to our success is our Associates.
We are committed to having the best talent in retail.
We welcomed over 10,000 new Associates to Kohl’s in 2003.
Together, our new Associates and our loyal Associates who
have been with us for many years are an outstanding team
that has what it takes to provide exceptional service for
our customers and continually improve our business.
Focused on Brands, Value and Convenience
While many department store chains try to imitate us,
there is only one Kohl’s. The foundation for our success is
our well-established concept of brands, value and convenience.
We remain focused on our core customer – a busy mom
shopping for her home and family. We offer the national
brands she wants and, in 2004, will further enhance the
shopping experience with a new color and skin care line
being developed through a strategic alliance with The Estée
Lauder Companies Inc. This is a very exciting opportunity
to add a new category to our stores and to meet a need
identified by our customers who don’t want to make a
special trip to purchase beauty products at another store.
We continued to expand our national brand selection
in early 2004 with new brands including Laura Ashley
and Gloria Vanderbilt for the home and Daisy Fuentes for
misses. Also in 2004, we will introduce the everGirl brand by
Nickelodeon for young girls. In addition, we repositioned
our private brands, Sonoma and Croft & Barrow, and will
be introducing new private brands in 2004.
Convenience continues to be a top reason why our customers
love Kohl’s. From our strong in-stock position and broad
merchandise selection to our ample parking, wide aisles,
stroller carts, fast check-out and hassle-free returns, the Kohl’s
shopping experience is designed around customer needs
and preferences. Add to that a strong credit card loyalty
program, great values throughout the store, e-commerce for
customers who prefer to shop from home and exceptional
Associates, and it’s easy to see why there’s no other national
department store chain with the unique appeal of Kohl’s.
Opportunities Ahead
We look ahead to 2004 as an exciting new year with a
wealth of opportunities to grow our business and improve
our financial performance. We’re making improvements
where they are needed, but above all, we’re going to continue
to focus on the key elements that have driven our success:
our proven concept of brands, value and convenience.
We’ll utilize our strong financial position to continue
our steady expansion into both new and existing markets.
More than ever, we remain committed to our Associates,
to our customers, to our shareholders, to our communities
– and to our future.
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Kevin Mansell
President Arlene Meier
Chief Operating Officer
Larry Montgomery
Chairman and
Chief Executive Officer