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Capital Spending Retailers

Retail Capital Spending

Retailer '03 openings '02 openings % chg
*a combination of new and relocated Eckerd drug stores. Penney did not specify the number of completely new stores. No department stores are being added.
Family Dollar 525 475 +10.5
Wal-Mart 400 274 +46.0
J.C. Penney 250* 19 —*
TJX 192 178 +7.9
Kohl's 80 75 +6.7
Target 80 94 -14.9
Linens 'n Things 55 to 60 48 +14 to +25
May 41 41 0.0
Federated 12 14 -14.3


Federated Department Stores

Cincinnati

'03 stores planned—12

'02 stores opened—14

+14.3%

Capital spending edges up after two straight years of decline at the parent of Macy's and Bloomingdale's to about $650 million in 2003, up about 3.7 percent from $627 million last year. This follows a dip of slightly more than 3 percent last year, and an even bigger decline from 2000 spending of $786 million. The retailer said it plans to open a dozen new stores this year, down from 14 in 2002. In 2001, when spending totaled almost $800 million, Federated opened 32 new stores, including 14 department stores and 18 Liberty House outlets it acquired and which were subsequently converted to Macy's. Balancing things out, Federated closed 15 department stores that same year.

Kohl's Corp.

Menomonee Falls, WI

'03 stores planned—80

'02 stores opened—75

+6.7%

Planning to add 80 new stores this year as it breaks into Western and Southwestern trading areas, Kohl's will spend about $825 million this year, up 15.2 percent from $716 million last year, including lease rights. In its 10K annual report the retailer said this year's spending will include both the cost of new stores as well as remodels. About 45 new stores are slated to open during the fall, concentrated in the Southwest, including 10 in Phoenix, two in Tucson, AZ, another in Flagstaff, AZ, and three in Las Vegas. Going forward, Kohl's gets even more aggressive next year, and plans to open 99 to 100 new stores. Kohl's now operates more than 300 units.

May Department Stores Co.

St. Louis

'03 stores planned—41

'02 stores opened—41

0.0%

In a straitened environment for department store retailers, May plans to sharply curtail spending this year, with projected outlays of about $600 million falling slightly more than 24 percent from the 2002 level of $790 million. But that won't stop May from opening new stores. On the table for this year are the opening of 41 stores, and the remodeling or expansion of 26 others. May plans to add 11 new department stores, and the Bridal Group will open 30 more, a mirror image of the 2002 store openings. Department stores opened so far this year include two Kaufmann's in Columbus, OH; a Filene's in Brockton, MA; and a Foley's in Houston.

Wal-Mart

Bentonville, AR

'03 stores planned—390 to 410

'02 stores opened—274

+46.0%

Now rolling out around the globe after dotting the American landscape with its stores, Wal-Mart plans to add roughly 5 percent to its store base this year. Capital spending will total in excess of $10 billion, ceo Lee Scott told shareholders at the company's annual meeting, up from $9.4 billion last year. 2002 expansion plans, said Scott, call for the addition of about 50 new U.S. discount stores, 180 to 185 Supercenters, 25 Sam's Clubs, 120 to 130 international stores, and 15 to 20 Neighborhood Markets, which are combination food and drugstores.

J.C. Penney

Plano, TX

'03 stores planned—250*

'02 stores opened— 19

—%*

J.C. Penney is focusing its new store openings in its Eckerd drugstore division, adding or relocating about 250 units this year. No new department stores are planned, following the shutdown of 26 units last year. Instead, Penney will refine operations at existing units. Eckerd, on the other hand, has been getting the lion's share of the spending for a sweeping overhaul — about 1,500 units have been renovated, and another 550 stores get a makeover in 2003. This year Penney plans outlays of about $1 billion, up from $658 million last year, divided evenly between Penney and Eckerd stores.

* A combination of new and relocated Eckerd units. Penney did not specify the number of completely new stores.

Linens 'n Things

Clifton, NJ

'03 stores planned—55 to 60

'02 stores opened—48

+14 to 25%

Still on a tear and rolling out new units at a rapid clip, Linens 'n Things is accelerating its expansion plans, planning to open between 55 and 60 new units in 2003, up substantially from a net 48 new stores last year, when the superstore retailer increased its square footage by 13.6 percent, to 13.6 million square foot Even with the continued expansion, the retailer scaled back its capital budget for property and equipment by almost 18 percent last year, to $82.2 million from $100.0 million in 2001, as the company stepped back to take a hard look at its business structure and costs.

Target Stores

Minneapolis

'03 stores planned—80

'02 stores opened—94

-14.9%

Cooling off somewhat, Target plans to add about 80 new stores this year, slowing down from the net 80 stores which opened their doors in 2002 — 62 Target and 32 SuperTarget units. Overall capital spending last year totaled $3.3 billion, up less than 2 percent. Investment in Target stores added up to 92 percent of the total. About 66 percent of total spending last year went for new stores, expansions and remodels, with the balance going for information system hardware and software, distribution capacity and other infrastructure to support store growth, primarily in the core Target stores.

Family Dollar

Matthews, NC

'03 stores planned—525

'02 stores opened—475

10.5%

Easily overlooked, but the nation's 11th largest retailer of home fashions products, Family Dollar plans to open about 575 new stores this year while closing 50 others, for a net gain of 525. And that's on top of a net 475 stores added in 2002. In just the past five years, the retailer opened almost 1,600 of the small, neighborhood stores; and over the past decade, more than 2,500 units. Fueling the rapid expansion, the retailer paid out $186.7 million in capital spending last year, an increase of 14.6 percent over 2001 outlays of $162.8 million.

The TJX Companies

Framingham, MA

'03 stores planned—192

'02 stores opened—178

7.9%

With seven retailing formats to choose from — ranging from off-pricer TJX to HomeGoods, a fledgling home fashions outlet — TJX plans to open 192 new units this year, almost 8 percent more than it opened last year. And there's no end in sight. The retailer said it has a long-term potential for 4,330 units across its various nameplates, well more than doubling the 1,843 stores it had in operation at the end of last year. But even with all that building, capital spending last year declined by 11.7 percent, to $396.7 million from $449.4 million in 2001.

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