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Kohl's Raises Comps, Store Count, Strike Points

Kohl's is setting a pace well above most competitors, and is doing it in style, building out exclusive brands, trading up merchandise, and unveiling scores of attractive new stores.

Kohl's said sales for the 5-week period ended Sept. 30, 2006 rose 26.1% over the 5-week period ended Oct. 1, 2005, while comp-store sales for the period were up an industry-leading 16.3%. Year-to-date total sales were up 16.2%, with a comp gain of 7.3%.

Kohl's chairman and ceo Larry Montgomery recently told analysts, “We continue to see strong sales performance across all lines of business.” He added, “We are experiencing healthy increases in both transactions per store and average transaction value.”

Kevin Mansell, president, pointed out how marketing and merchandising initiatives are driving Kohl's brand exclusives and private labels, as in a recent “very successful” direct mail piece promoting its youthful Apt. 9 bedding ensembles. He said kohls.com is doubling its number of skus to 100,000 and doubling its distribution center to about a million square feet. Kohls.com also provides “event support” in coordination with TV and other ads, to drive business into brick-and-mortar stores, Mansell said.

Tom Kingsbury, senior executive vp, described a range of “strike points,” meaning themed power presentations of better merchandise, often designed with major brands to lend a “specialty store look” to key areas of the stores. He pointed out one that gives a “master bedroom look to better showcase our updated and contemporary look from Candies and Apt. 9,” now in more than 500 stores.

On Oct. 5 Kohl's opened 65 stores in 30 states, its largest ever single-day opening schedule. The chain will operate 817 stores by the end of the year.

Features in the new stores are decidedly upscale: fitting rooms are augmented by lounges, airy outer facades usemore glass to show off products, and wood finishes are streaming through stores, from the finish on checkout areas to wall-size “home hutches” that turn dinnerware displays into romantic focal points.

To drive product development for licensed lines, Kohl's will open a design office in New York in January.

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