QUOTE AND NEWS
Yahoo  Jan 19  Comment 
U.S. buyout firm Bain Capital has joined Key Safety Systems (KSS) in the U.S. auto parts supplier's bid to rescue Takata Corp (7312.T), a source said, as the Japanese firm struggles for survival after a massive recall linked to its faulty air...
Clusterstock  Jan 18  Comment 
Retail stocks are under pressure on Wednesday after Target announced it was slashing its guidance as a result of " disappointing traffic and sales trends." The big box retailer says sales fell  1.3% in the crucial holiday period and now...
Motley Fool  Jan 13  Comment 
Department store chains and other brick-and-mortar stalwarts are clearly struggling, but this accounting trick is making their store-based sales look better than they actually are.
Benzinga  Jan 12  Comment 
Contrarian investors typically buy poor performing stocks that have become out of favor with investors. Case in point, shares of Macy's Inc (NYSE: M) hit a new 52-week low of $29.70 on Thursday and are now lower by more than 15 percent since the...
Benzinga  Jan 11  Comment 
$41.36 - Intraday high as of 1:19 PM $41.21 - Tuesday close $40.70 - Monday/Tuesday lows $40.68 - Current price as of 1:19 PM $40.39 - Intraday low as of 1:19 PM © 2017 Benzinga.com. Benzinga does not provide investment...
Forbes  Jan 11  Comment 
Investors in Kohl's Corp. (NYSE: KSS) saw new options become available today, for the February 24th expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the KSS options chain for the new February 24th contracts and...
Benzinga  Jan 10  Comment 
$42.10 - January 6 high $41.80 - Intraday high as of 11:10 AM $40.96 - Monday close $40.70 - Monday/intraday low a of 11:10 AM © 2017 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.




 

Kohl’s (NYSE: KSS) is a U.S. department store chain that sells a mix of items including men's and women's apparel, home decor, and accessories. The department store appeals to middle-class consumers by selling discounted branded and private label clothing and home goods. Kohl's is in the same category of national department store competitors such as J.C. Penney (JCP) and Macy's Inc. (M).

Kohl's is vulnerable to a weak U.S. economy and declining consumer spending because the company has no stores outside of the US and does not have an international presence to serve as a buffer to fluctuations in the US economy. However, Kohl's discounted pricing allows it to ride out tough economic times better than its competitors.

Company Overview

Business Financials

Kohl’s operates specialty department stores and an e-commerce site in the United States that sell moderately-priced branded and private label merchandise.

Business Segments

Kohl's reports its sales in six different business segments:

  • Women's (32% o
  • Home (18% of net sales)
  • Children's (13% of net sales)
  • Accessories (10% of net sales)
  • Footwear (8% of net sales)

Kohl's stores and e-commerce site carries a variety of clothing, accessories and home goods. The company's merchandise offerings include products from branded manufacturers, such as Nike, in addition to exclusive and [[private labr Vera Wang and the Chaps brand that Kohl's offers exclusively from Polo Ralph Lauren (RL).

Business Growth

FY2010 (ended January 30, 2011)[1]

  • Net sales increased 7.1% to $18.4 billion.
  • Net income increased 12.4% to $1.1 billion.

Trends and Forces

Growing Kohl's Exclusive and Private Brands

Exclusive and private label merchandise account for almost half of Kohl's sales, a figure Kohl's has worked to increase by adding new exclusive brands like Helix, Mudd, Dana Buchman, and Hang Ten.

Department stores are increasingly seeking to distinguish themselves and earn higher profit margins by offering exclusive brands and private label brands. Exclusive brands are brands marketed under the wholesaler's name that are sold only in a particular chain; one exclusive brand at Kohl's is the Chaps line by Polo Ralph Lauren (RL). Private label brands are produced by wholesalers, but sold under the brand name of the retailer. Exclusive brands such as Simply Vera by fashion designer Vera Wang, can help draw customers into Kohl's stores, as the products can only be found at Kohl's. Kohl's own private label products are typically priced lower than branded merchandise, but have a higher profit margin for Kohl's as the retailer is able to receive the good at a lower cost by avoiding branded manufacturers.

Higher Raw Materials Costs May Force An Increase In Clothing Prices

In a recovering economy, the last thing that consumers want is higher prices, especially on necessities like clothing. Many in the fashion industry are expecting price increases of as much as $2 for a t-shirt. As consumers ease back into discretionary spending, higher clothing prices delay the recovery as they discourage spending. Companies like Kohl's rely on consumers spending money on clothes, and if higher prices discourage consumer spending, the company's bottom line will suffer due to these significant factors. blab

Competition

Kohl’s is one of the smallest national department store retailers. It competes primarily against other department stores, but also is facing increasing competition from discounters and mass merchandisers like Target (TGT) and Wal-Mart (WMT) as these companies grow their clothing and home goods categories.

Kohl's primary competitors are moderate-priced department stores, J.C. Penney (JCP), Macy's Inc. (M) and Sears Holdings (SHLD). Kohl's main points of differentiation from these other companies is Kohl's usage of the off-mall store model and low prices. These factors have played key roles in Kohl's ability to cope with recessionary environment while its competitors have lost more sales than Kohl's as shoppers trade down and visit malls less frequently.

References

  1. KSS 2010 10-K pg. 13
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