Kohl's 2008 Annual Report Download - page 10

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Disruptions in our information systems could adversely affect our sales and profitability.
The efficient operation of our business is dependent on our information systems. In particular, we rely on
our information systems to effectively manage sales, distribution, merchandise planning and allocation functions.
We also generate sales though the operations of our Kohls.com website. The failure of our information systems
to perform as designed could disrupt our business and harm sales and profitability.
Unauthorized disclosure of sensitive or confidential customer or employee information could severely damage
our reputation, expose us to risks of litigation and liability, disrupt our operations and harm our business.
As part of our normal course of business, we collect, process and retain sensitive and confidential customer
and employee information. Despite the security measures we have in place, our facilities and systems, and those
of our third party service providers, may be vulnerable to security breaches, acts of vandalism, computer viruses,
misplaced or lost data, programming and/or human errors, or other similar events. Any security breach involving
the misappropriation, loss or other unauthorized disclosure of confidential information, whether by us or our
vendors, could severely damage our reputation, expose us to risks of litigation and liability, disrupt our
operations and harm our business.
Item 1B. Unresolved Staff Comments
Not applicable
Item 2. Properties
Stores
As of January 31, 2009, we operated 1,004 stores in 48 states. Our typical, or “prototype,” store has 88,000
gross square feet of retail space and serves trade areas of 150,000-200,000 people. Most small stores are 68,000
square feet and serve trade areas of 100,000 to 150,000 people. Our urban stores, currently located in the New
York and Chicago markets, serve very densely populated areas of up to 500,000 people and are larger than our
prototype store, averaging approximately 125,000 gross square feet of retail space.
Our typical lease has an initial term of 20-25 years and four additional five-year options, but some leases
have two to eight renewal options for consecutive five or ten-year extension terms. Substantially all of our leases
provide for a minimum annual rent that is fixed or adjusts to set levels during the lease term, including renewals.
Approximately one-fourth of the leases provide for additional rent based on a percentage of sales over designated
levels.
The following tables summarize key information about our stores.
Number of Stores Retail Square Footage
2007 Additions 2008 2007 Additions 2008
(in thousands)
Mid-Atlantic Region:
Delaware ................................... 5 — 5399 — 399
Maryland ................................... 16 1 17 1,240 61 1,301
Pennsylvania ................................ 40 3 43 2,969 196 3,165
Virginia .................................... 25 2 27 1,879 109 1,988
West Virginia ............................... 7 — 7503 — 503
93 6 99 6,990 366 7,356
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