MILWAUKEE — Kohl’s, among America’s fastest-growing retailers, says it can more than double its store count, reaching at least 1,000 stores in the near future.
The promotional department store chain, currently with 492 units, disclosed the target at its annual meeting here Thursday.
Chairman Larry Montgomery also confirmed in an interview after the meeting that Kohl’s will take over the former Kmart site in Fresh Meadows, Queens, but he added that Kohl’s has more New York stores “on the drawing boards,” though he declined to be more specific about sites. The Queens store, he said, would open in a couple of years, and is the first site selected by Kohl’s in New York City. Kohl’s already operates just outside the city, with several locations on Long Island, in Connecticut and in New Jersey.
Montgomery said the company is always looking for real estate sites, and is considering available former Kmart sites around the country along with other options.
The Menomonee Falls, Wis.-based chain has been adding about 20 percent to its square footage each year, including the opening in March of 28 stores in the Los Angeles area.
Kohl’s has spent $2.7 billion in the past five years on new and remodeled stores, and will spend about $800 million this year to open about 80 stores. This fall, the company will make its debut in the Las Vegas and Phoenix markets and will add 95 to 100 stores next year. About half of the 2004 openings will be in new markets, Montgomery said.
The southern California expansion is going well, Montgomery said. “We’re very pleased with it,” he said. But he said the stores would need to get through the back-to-school and holiday seasons before the company would be able to compare them with the successful entry into the New York tri-state area in 2000.
Montgomery also said Kohl’s was holding off for now on decisions about its small-store experiment. The company opened four 62,000-square-foot test stores in three small cities in the Midwest and one in North Carolina.
“We need about a year to see how they fully cycle,” Montgomery said. “It’s a very, very small part of what’s going on.”
Also at the meeting, shareholders narrowly approved a proposal from a Philadelphia pension fund calling for Kohl’s to expense the cost of all future options on its financial statements. The proposal, from the Carpenters Annuity Fund of Philadelphia and Vicinity, passed by a 50.5 percent majority, according to a preliminary tally.
Montgomery said the board of directors would consider the recommendation, which is advisory, not binding. The board was on record as opposing the proposal because of the lack of a national accounting standard for calculating the fair value of options.
Montgomery said the board was not opposed to the general concept of expensing options, which has been a hot topic in financial circles this year. Those who favor expensing options point out that failing to do so generally results in inflated earnings.
With the vote, Kohl’s joins at least 10 other major companies whose shareholders have approved such measures, including Apple Computer, NCR, Black & Decker and Wells Fargo.