Kohl's Corp. unveiled plans to open 1,400 stores by 2012 as part of the company's five-year strategic growth plan. The additional stores would be an increase of more than 50 percent from its current store base of over 900 stores.
The department store's ambitious goals for that time frame also include earnings growth of 15 to 17 percent on a compound annual basis, a comparable-store sales increase of 2 to 4 percent a year and a 9 to 11 percent annual hike in total sales.
The retailer made the announcement at an investor meeting held in Indianapolis Tuesday. The company said it expects capital spending to be about $1.6 billion to $1.7 billion annually, with investments in new stores, remodels, technology and merchandise presentation.
"For the past two years, we have exceeded our financial objectives and believe we are well positioned to deliver our long-term strategic growth plan," said Larry Montgomery, chairman and chief executive officer, in a statement. "We remain focused on merchandising, inventory management, marketing and the in-store shopping experience, as well as our expansion plan."
But the Wisconsin-based retailer recently has posted disappointing summer same-store sales, missing analysts' expectations. In August, comps fell 0.6 percent and were flat in July.
In order to drive growth and improve customer service, Kohl's said it will geographically tailor its merchandise mix to the needs and desires of the shopper demographic. Kohl's also is trying to encourage cross-shopping among departments by introducing accessories items in juniors to create wardrobe ideas, include more engaging in-store presentations and revitalize marketing to better communicate with the customer.
Today, the company will open 80 new stores — its largest one-day store opening to date. In mid-November, the company will add 15 stores. The fall grand openings will create 14,000 jobs.
Kohl's also will enter Wyoming, which will place the midtier retailer in 47 states.
Kohl's previous five-year plan, which was released in August 2005, included goals to expand the company's market share, double sales to $24 billion, achieve a net income of $1.9 billion and operate more than 1,200 stores by 2010. Last year, earnings reached $1.11 billion, or $3.31 a diluted share, while total sales topped $15.54 billion.
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