Kohl's 2008 Annual Report Download - page 3

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PART I
Item 1. Business
Kohl’s Corporation (the “Company” or “Kohl’s”) was organized in 1988 and is a Wisconsin corporation.
We operate family-oriented department stores that sell moderately-priced apparel, footwear and accessories for
women, men and children; soft home products such as sheets and pillows; and housewares. Our stores generally
carry a consistent merchandise assortment with some differences attributable to regional preferences. Our stores
feature quality private and exclusive brands which are found “Only at Kohl’s” as well as national brands. Our
apparel and home fashions appeal to customers with style preferences ranging from classic to contemporary. As
of January 31, 2009, we operated 1,004 stores in 48 states.
As reflected in the table below, our merchandise mix has been consistent over the last three years:
2008 2007 2006
Women’s ........................................................ 32% 33% 33%
Men’s ........................................................... 19 19 19
Home ........................................................... 18 18 18
Children’s ........................................................ 13 13 13
Accessories ....................................................... 10 99
Footwear ......................................................... 888
In addition, we offer on-line shopping on our website at www.Kohls.com. Designed as an added service for
customers who prefer to shop using the internet, the website offers key items, family apparel, and home
merchandise. We continue to expand our on-line offerings to include both items which can be purchased in our
stores and items which are not generally available in our stores, such as furniture and certain electronics. The
website is designed to provide a convenient, easy-to-navigate, on-line shopping environment that complements
our in-store focus.
An important aspect of our pricing strategy and overall profitability is a culture focused on maintaining a
low cost structure. Critical elements of this low cost structure are our unique store format, lean staffing levels,
sophisticated management information systems and operating efficiencies which are the result of centralized
buying, advertising and distribution.
Our fiscal year ends on the Saturday closest to January 31. Unless otherwise noted, references to years in
this report relate to fiscal years, rather than to calendar years. Fiscal year 2008 (“2008”) ended on January 31,
2009 and was a 52-week year. Fiscal year 2007 (“2007”) ended on February 2, 2008 and was a 52-week year.
Fiscal year 2006 (“2006”) ended on February 3, 2007 and was a 53-week year.
Strategic Initiatives
Management believes that its four strategic initiatives are keys to achieving future success. These initiatives
focus on merchandise content, marketing, inventory management and the in-store shopping experience.
Our merchandise content initiatives are focused on increasing market share by expanding Kohl’s appeal to a
broader range of customers. New brand launches in 2008 included:
• Jumping Beans – our classic opening price point brand in the children’s category
• Bobby Flay – an expansion of the Food Network brand with celebrity talent, featuring Mediterranean
influences, bold colors and rich textures
• FILA Sport – performance and leisure apparel, footwear and accessories for women, men and children
• ELLE – expansion of this exclusive brand of Women’s apparel to all stores
• Abbey Dawn – a new juniors’ lifestyle brand by award-winning singer/songwriter Avril Lavigne
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