Kohl's 2009 Annual Report Download - page 5

Table of Contents
Our new and remodeled stores continue to reflect our latest thoughts in store design. Recent enhancements include new and updated exteriors and
point-of-sale stations; improved fitting rooms, lounges, restrooms and customer service areas; and specialty fixturing. We have also updated the
junior’s, kids, young men’s and shoe departments and redesigned our center core to improve sightlines throughout the store. Remodels and new
stores in 2010 will contain a dramatically re-designed home area which will allow us to have more capacity on the sales floor and provide more
flexibility in our fixtures.
As a result of our in-store experience and other initiatives, we have seen an approximately 7% improvement in our customer service scorecard
results in 2009. Customer service scores are delivered from direct customer surveys conducted by an independent research firm.
For discussion of our financial results, see Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
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Our expansion strategy has been, and will continue to be, designed to achieve profitable growth. At the time of our initial public offering in 1992, we
had 79 stores in the Midwest. As of year-end 2009, we operated 1,058 stores in 49 states and in every large and intermediate sized market in the United
States. As a result of economic conditions throughout the United States, our store growth in 2009 was slower than in prior years.
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Number of stores 1,004 54  30 1,088
Gross square footage (in millions) 89 4  2 95
Retail selling square footage (in millions) 75 3  2 80
We expect that the expansion rate in 2009 and 2010 will be more indicative of future expansion than our past history. We will, however, continue to
focus our future expansion efforts on opportunistic acquisitions given the current retail environment as well as fill-in stores in our better performing markets.
The Kohl’s concept has proven to be transferable to markets across the country. New market entries are supported by extensive advertising and
promotions which are designed to introduce new customers to the Kohl’s concept of brands, value and convenience. Additionally, we have been successful in
acquiring, refurbishing and operating locations previously operated by other retailers. Of the 1,058 stores we operated as of January 30, 2010, 237 are take-
over locations, which facilitated our initial entry into several markets. Once a new market is established, we add additional stores to further strengthen market
share and enhance profitability.
We remain focused on providing the solid infrastructure needed to ensure consistent, low-cost execution. We proactively invest in distribution capacity
and regional management to facilitate growth in new and existing markets. Our central merchandising organization tailors merchandise assortments to reflect
regional climates and preferences. Management information systems support our low-cost culture by enhancing productivity and providing the information
needed to make key merchandising decisions.
We believe the transferability of the Kohl’s retailing strategy, our experience in acquiring and converting pre-existing stores and in building new stores,
combined with our substantial investment in management information systems, centralized distribution and headquarters functions provide a solid foundation
for further expansion.
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We receive substantially all of our merchandise at nine retail distribution centers. A small amount of our merchandise is delivered directly to the stores
by vendors or their distributors. The retail distribution centers,
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