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…home a mixed bag

Andrea Lillo -- Home Textiles Today, August 25, 2003

MENOMONEE FALLS, WI — After aggressively ridding itself of excess clearance in the second quarter, Kohl's is "pleased" with the results, said Kevin Mansell, president. Though clearance may have affected profitability, he added, it was necessary to be comfortable with the overall inventory levels and content as well as to be well-positioned for the balance of the year.

For the quarter, summer home was one of the categories that "struggled," while basics in home was one of the better performers. "Apparel and home continue to do well," he added during the company's second quarter conference call, and they are doing better then last year's levels. Comp store traffic counts were also up, and transactions in July increased 7.5 percent.

For the fall season, inventories are based on a three percent sales increase. At the end of the year, Mansell believed that inventories would be up only in the single digits, compared to last year, when they were heavier than they should have been.

"It was a pretty difficult first half of the year," added Larry Montgomery, chairman and ceo. However, "we are well positioned for the second half" and he was pleased with its back-to-school business so far. The retailer, which upped its new store count this year to 85 from 80, will add the new markets of Phoenix, Tucson, Flagstaff, Little Rock, Las Vegas and Birmingham this fall.

Responding to a question about systems, Arlene Meier, coo, said that it typically looks at discounters, such as Wal-Mart or Target, because "they are ahead of department stores." Overall, she felt good about Kohl's systems, and it itself was "ahead of the traditional department stores." Its recent inventory issues were also not the result of its systems.

Montgomery added that it will have a better idea on how the four small-format stores it opened in third quarter last year are performing at the end of the year, after they go through a second Christmas season. However, Kohl's continues to focus on its more traditionally sized format, he added.

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