Kohl's 2009 Annual Report Download - page 4

Table of Contents
• Mudd – launched in juniors and girls prior to the 2009 back-to-school shopping season.
• LC Lauren Conrad – exclusive partnership with Lauren Conrad, launched in approximately 300 Kohl’s stores and Kohls.com in October
2009. LC Lauren Conrad will be rolled out to all stores nationwide in March 2010. We accelerated the roll-out due to better than expected
sales. Our original plans did not call for roll out until Fall 2010.
Helix, our newest private brand, launched in February 2010. Helix is an opening-price brand positioned in our Contemporary Good lifestyle/price
zone and will be featured in young men’s tops, fashion bottoms and shorts.
The success of our recently launched brands, as well as our other exclusive and private brands, continue to drive increased penetration of our
exclusive and private labels. Exclusive and private brand sales as a percentage of total sales increased approximately 220 basis points to 44.3% for
2009.
• Our marketing initiatives are designed to differentiate Kohl’s in the marketplace while maximizing the return on our marketing investment. Our
2009 marketing efforts used “The More You Know, The More You Kohl’s” platform to focus on the value of shopping at Kohl’s. Our marketing
emphasized the power of Kohl’s savings tools that allow our customer to save more money—like compelling sale events, savings for Kohl’s
Charge cardholders, sale events with no exclusions, and unique “Only at Kohl’s” events such as Kohl’s Cash and Power Hours.
We used all media types to communicate the message including both national and spot television, radio, newspaper tab insertions, direct mail, e-
mail and digital media along with our own Kohl’s.com website. Our marketing also emphasized our flexible, no questions asked, return policy.
• Our inventory management initiatives are designed to ensure that we have the right inventory, in the right stores, at the right time. Size
optimization is focused on ensuring that each of our individual stores has inventory in the correct style, color and size. Markdown optimization is
focused on pricing clearance items at the appropriate price for each location’s inventory and sales history.
Another important inventory management initiative is to increase our speed-to-market through our concept-to customer strategy. Two years ago, it
took 45 weeks from the start of development to the delivery of products to the stores. Today, our cycle time is typically 20 to 32 weeks, with our
fastest brands delivering in 12 weeks and reorders in four to six weeks.
During 2009, we continued to aggressively manage our inventory levels by reducing seasonal inventory levels, while maintaining levels in basic
areas such as hosiery and underwear. As a result of strong inventory management and cycle time reductions, clearance inventory levels have
decreased for a second consecutive year. Our year-end inventory per store (on a dollar basis) decreased 0.9% from last year.
• The objective of our in-store shopping experience initiative is to satisfy the changing needs and expectations of our customers. Practical, easy
shopping is about convenience. At Kohl’s, convenience includes a neighborhood location close to home, convenient parking, easily accessible
entry, knowledgeable and friendly associates, wide aisles, a functional store layout, shopping carts/strollers and fast, centralized checkouts.
Though our stores have fewer departments than traditional, full-line department stores, the physical layout of the store and our focus on strong in-
stock positions in style, color and size is aimed at providing a convenient shopping experience for an increasingly time-starved customer.
Remodels are also an important part of our in-store shopping experience initiative as we believe it is extremely important to maintain our existing
store base, even in this difficult environment. We completed 51 store remodels in 2009—an increase from the 36 stores which were remodeled in
2008—and currently plan to remodel 85 stores in 2010. We have been able to compress the remodel duration period from 16 weeks to nine weeks
over the past two years to minimize costs and disruption to our stores, benefiting our sales and customer experience.
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