Kohl's 2006 Annual Report Download - page 5

Our focus on lifestyle merchandising
is designed to meet our objective of
increasing market share by expanding our
appeal to a broader range of customers.
Brands such as Chaps continue to attract
our core classic customer. In the updated
and contemporary categories, daisy
fuentes,apt. 9,Candie’s,Tony Hawk and
Casa Cristina are just a few of our new
brands and brand extensions.
In 2007, we’ll add even more variety and
innovation to our merchandise through
exclusive licensing agreements for Simply
Vera Vera Wang ,ELLE and Food Network
collections. Together, these will be the
largest number and by far the largest
volume of new and expanded offerings
we have ever launched. To support our
growing portfolio of world-class brands,
we will open a design offi ce in the heart
of New York’s garment district in spring
of 2007.
Our marketing program is designed
to differentiate our stores in the
marketplace. The program uses a
strategically selected variety of media
to build awareness and desire for our
national, private and exclusive brands,
and to increase traffi c and sales. Our
marketing statement, “Only at Kohl’s,”
distinguishes our stores and our exclusive
brands, giving customers an even more
compelling reason to shop our stores.
Our focus on inventory management
includes activities to improve inventory
fl ow and increase speed-to-market. As
always, our goal is to meet customer
expectations for in-stock merchandise in
a broad range of sizes and colors.
Enhancing the in-store shopping
experience revolves around making our
stores more visually exciting and easier
to shop. Introduced in 2006, our new
innovation store design is aimed squarely
at broadening customer appeal. From the
exterior showcase windows displaying the
latest fashions to creative merchandise
displays highlighting the newest trends,
our innovation stores encourage shoppers
to browse every department. Of the 85
stores we opened in 2006, approximately
half were innovation stores. We plan to
incorporate elements of this format into
all new and remodeled stores in 2007.
For us, growth is an all-encompassing
and never-ending process. Through
ongoing innovation across the business,
we are converting our core concepts
of brands, value and convenience
into sustained long-term growth and
profi tability. The signifi cant increase
in our stock price in 2006 refl ects our
success in achieving these goals.
The People behind our Growth
It’s no secret that the key to our success
has always been the talent within our
organization and our 114,000 dedicated
Associates who make our customers their
fi rst priority. Our commitment to our
great team of Associates was underscored
in 2006 with our selection by Business
Week magazine as one of the top 50
companies to launch a career.
We wish to extend a deep and heartfelt
thank you to Arlene Meier and Jay Baker.
Arlene retired after 16 years with the
company, serving for the past six years
as chief operating offi cer and a director.
She retired from the Board in February
2007. Jay was one of the three principals
who built the solid foundation for our
success, serving as president for 13
years. Jay will retire from the Board
in May 2007.
Stephen E. Watson joined our Board
of Directors in 2006, bringing his
30 years of retail industry experience,
including 23 years with Target
Corporation. We also welcomed
Tom Kingsbury as a principal in
the newly created position of senior
executive vice president.
Coming off another outstanding year,
it is appropriate that we again thank
the people who made it happen – our
Associates, shareholders, customers and
business partners. With their help, you
can continue to expect great things
from Kohl’s.
“Our sales have grown by 50% over the past three years,
from $10 billion in 2003 to a record $15.5 billion this year.
No other major department store has a growth rate that
comes even close.”
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Larry Montgomery
Chairman and Chief Executive Offi cer
Kevin Mansell
President
Tom Kingsbury
Senior Executive Vice President