1962 – The story of our company began in 1962 when Max Kohl opened the first Kohl’s Department Store in Brookfield, Wisconsin. He started his career with a small grocery business that developed into the largest supermarket chain in the Milwaukee area. Then he expanded into retail, creating Kohl’s Department Stores. He positioned Kohl’s between the higher-end department stores and the discounters, selling everything from candy to engine oil to sporting equipment.
1972 - Kohl’s had expanded to five department stores.
1978 - BATUS, Inc., the U.S. division of BAT Industries, (British American Tobacco) PLC, purchased an 80 percent stake in the Kohl’s Food and Department Stores and took complete control of the company. At that time, the Kohl family withdrew from the operations of the company. Over the next decade, Kohl’s grew from 10 to 39 department stores in Wisconsin, Illinois and Indiana.
Early 1980s - BATUS acquired several other retailers including Gimbels, Saks Fifth Avenue and Marshall Field & Co.
1983 – BATUS sold Kohl’s Food Stores to Great Atlantic and Pacific Tea Company (A&P). A&P closed the Kohl’s food stores in 2003.
Mid 1980s - Kohl’s Department Stores’ emphasis on "value oriented," "bargain basement" marketing didn’t fit with BATUS’ other retail holdings. BATUS was unable to withstand increasing competitive pressures and began to sell off its retail holdings. By 1990, BATUS was out of retail all together.
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Purchase By Kohl’s Management
1986 – A management-led group of investors formed Kohl’s Corporation and acquired Kohl’s Department Stores from BATUS, Inc. Our management team spent the next year and a half absorbing the buyout, refocusing product lines and continuing the Kohl’s business concept of "a value oriented retailer selling moderate-priced merchandise." At that time, we operated 40 stores with annual sales of $300 million and over 5,000 Associates.
1987 – Kohl’s ranked 8th in Wisconsin’s top 100 privately owned companies. Over 80 percent of our merchandise carried national brand names recognized for quality – setting the company apart from mass merchandisers and discounters. The chain dropped low-volume, low-margin departments such as candy, sewing notions and sporting goods in favor of higher-margin merchandise such as linens and jewelry.
1988 – Our greatest growth to date came with the purchase of 26 Main Street stores from Federated Department Stores. This acquisition enabled Kohl’s to move into new markets in Michigan, Chicago and Minneapolis/St. Paul.
1988 - 1992 – Our sales increased from $388 million to $1 billion.
1992 – We took a major step in preparing for our future growth by becoming a public company. Our company completed an initial public offering of 11.1 million shares, one of Wisconsin’s largest initial offerings. We began expanding and upgrading our distribution facilities, automating merchandise handling and developing plans to open 14-16 new stores each year.
Our distribution center in Menomonee Falls, Wisconsin, which supplied our stores with 98 percent of their merchandise, was expanded to 500,000 square feet. This was enough capacity to service 120 stores.
From 1992 to 1999, we more than tripled our number of stores to 259, while our revenues quadrupled, from $1.1 billion to $4.56 billion.
1994 – Our second distribution center in Findlay, Ohio, was completed to serve our stores in central Illinois, Ohio, Michigan, Indiana, Kentucky, Tennessee and West Virginia.
1995 – Kohl’s continued to refine the store format, completing our phase-out of electronics.
1997 – To support a planned expansion eastward into the Mid-Atlantic region, we built a third distribution center in Winchester, Virginia, which opened in the summer of 1997. This facility, with a capacity of 100 stores, served Kohl’s stores in seven Mid-Atlantic states.
1998 – A smooth and well-planned management transition began in 1998 and was completed in 2000 with the retirement of Bill Kellogg, Jay Baker and John Herma. Succeeding them were Larry Montgomery as chief executive officer, Kevin Mansell as president and Arlene Meier as chief operating officer. With a strong management team and successful business strategies, Kohl’s was well positioned to continue its expansion strategy and move into the 21st century.
1999 – Our fourth distribution center was completed in Blue Springs, Missouri. It had capacity for 80 to 100 stores and served the South Central part of the country.
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Expansion In The New Millennium
2000 – By 2000, we operated 298 stores in 25 states with 43,000 Associates. We targeted several new markets, entering the Northeast, including Connecticut, New Jersey and the New York metropolitan area. Plans for future expansion included moving into New England with the acquisition of 12 former Bradlees stores in the Boston market.
For the year, the company posted a remarkable same-store sales increase of 9 percent. Revenues jumped 35 percent to reach $6.15 billion.
2001 – We entered the fast growing Atlanta market with 15 stores. Other new markets included Arkansas, Oklahoma City, Austin, Fayetteville and El Paso. To facilitate this drive into the south central part of United States, we opened a fifth distribution center in Corsicana, Texas.
We upgraded our brand offerings, commissioning special lines from Jones Apparel Group, Inc. (the Nine & Co.® brand), Liz Claiborne, Inc. (the Villager brand) and once again offering children’s apparel from OshKosh B’Gosh®, Inc. Nearly 60,000 Associates helped Kohl’s post net income of $7.5 billion with same store-sales up 6.8 percent.
The introduction of Kohls.com brought online shopping to our customers, providing the added convenience of shopping from home. We gave online customers the same level of service they had come to expect from our stores. To support the move into e-commerce, we opened a 500,000-square-foot fulfillment center in Monroe, Ohio.
2002 – May 2002 marked our ten-year anniversary as a public company. When Kohl’s went public in 1992, it had 76 stores in six states. Since the 1992 initial public offering, we had opened 344 new stores consisting of 256 new builds and 88 take-over locations, bringing the total to 420 stores in 32 states.
We entered the Boston and Houston markets in 2002 and also opened our first stores in New Hampshire and Rhode Island, as well as in Nashville, Tennessee.
We introduced a new store prototype designed for smaller markets. The smaller stores were about 60,000 square feet, compared with the traditional store size of over 90,000 square feet. Two new distribution centers opened in Mamakating, New York to support the Northeast region, and in Corsicana, Texas to support the Houston market and the South Central region. Net sales were $9.1 billion in 2002, with same-store sales up 5.3 percent.
2003 – Our current CEO Larry Montgomery was appointed chairman of the board of directors.
That same year, we opened 28 stores in California, giving our company a coast-to-coast presence for the first time in our history. The 28 stores were spread out over five Southern California counties. These stores were supported by a new distribution center in San Bernadino, California. In late 2003, we continued our Southwest expansion, with new stores in Arizona and Nevada bringing our total to 542 stores.
However, not all was well at Kohl’s. While revenues were up a respectable 12.7 percent, surpassing $10 billion for the first time, net income fell for the first time in ten years, dropping 8.5 percent to $581 million. Same-store sales fell 1.6 percent.
We had failed to execute to our high standards in three key areas: inventory levels and content, the customer shopping experience and marketing. The stores were over-stocked and difficult to shop. The assortment in misses and women’s was not what the customer was looking for. And, our marketing was no longer unique in a highly promotional retail environment.
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Return To Top Performance
2004 – We concentrated on turning our performance around. We reduced inventory levels and improved our in-store operations. We also made minor adjustments to the store design to make it easier for our customers to navigate and to highlight our various brands.
Kohl’s achieved record sales for the thirteenth consecutive year as a public company. Net sales were $11.7 billion, a 14 percent increase. Comparable store sales were up 0.3 percent. On the merchandise side, we added seven new exclusive, private or national brands in 2004. In-home products, exclusive Laura Ashley Lifestyles and Gloria Vanderbilt® lines debuted, as did a new apparel line from celebrity, Daisy Fuentes.
We also added a new category to our stores, cosmetics, via a partnership with Estée Lauder Companies Inc. We added 95 stores in 2004, increasing our total from 542 to 637 stores. California became our largest state with 62 stores, as we entered five new markets: San Francisco, Sacramento, San Diego, Fresno and Bakersfield. Other new markets in 2004 included Salt Lake City, Utah; Memphis, Tennessee; and Rochester, New York.
2005 – We introduced our new positioning statement: expect great things and made significant strides in bringing the statement to life.
We opened 95 stores in both new and existing markets, operating 732 stores in 41 states at the end of the year, supported by 107,000 Associates. New markets included Buffalo, New York and Orlando and Jacksonville, Florida.
To support this new southeastern push, we opened our eighth distribution center, in Macon, Georgia. We also announced a plan to open 500 stores by 2010. Net sales increased 14.5 percent to a record $13.4 billion, while comparable store sales rose 3.4 percent.
2006 – We opened 85 new stores, including our expansion into the Northwest with new stores in Oregon and Washington. We now operated in every region of the country.
To support this new region, as well as our continuing growth in the Southwest, we opened our ninth distribution center in Patterson, California, with the capacity to support 110 stores. By the end of the year, we operated 817 stores in 47 states with 114,000 Associates.
Sales grew to a record $15.5 billion in 2006. Comparable store sales rose 5.9 percent, increasing in all regions and all four quarters, boosting Kohl’s to the top of the rankings among its peer group.
In 2006, we introduced a new innovation store design, which was aimed squarely at broadening customer appeal. From the exterior showcase windows displaying the latest fashions, to creative merchandise displays highlighting the newest trends, the innovation stores encouraged our shoppers to browse every department. Of the 85 stores opened in 2006, approximately half were innovation stores. We planned to incorporate elements of this format into all new and remodeled stores in 2007.
We introduced West End and AB Studio in misses’ and Stamp 10® in both misses’ and men’s. In young men’s and boys’, we launched the Tony Hawk® brand. Chaps was now in misses’, men’s, boys’, footwear and infants’/toddlers’ with plans to expand into women’s, girls’ and home.
2007 – We added the Rachael Ray line of cookware and formed an exclusive relationship with Food Network, the undisputed authority in cooking and entertainment, to develop a Food Network® branded line of home goods. This brand will be introduced fall 2007.
We also introduced a new home furnishings line, Casa Cristina, by Cristina Saralegui, an influential role model in today’s Hispanic community. This line will ultimately expand across several home categories in 2007.
Arlene Meier retired after 16 years with the company, serving for the past six years as chief operating officer and a director. The company welcomed Tom Kingsbury as a principal in the newly created position of senior executive vice president.
We announced plans to open over 100 stores in 2007, and to continue our growth strategy of developing exclusive collections of world-class brands.
The most significant initiative for 2007 and the largest launch in our history, is the introduction of the Simply Vera Vera Wang premium fashion and lifestyle brand, beginning in fall 2007. Designed in partnership with the celebrated American designer Vera Wang, the collection will span the entire store, including ready-to-wear misses’, accessories, jewelry, footwear, intimate apparel and soft home.
Kohl’s also teamed up with ELLE magazine, the world’s largest fashion magazine, to develop another new brand available "Only at Kohl’s." The ELLE® line of misses’ apparel features contemporary, runway inspired looks that appeal to the younger segment of our core customer base. The line, which launched in selected stores in spring 2007, demonstrates a speed-to-market strategy that will bring new ELLE® fashions into our stores every month.
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A Bright Future
As our history illustrates, Kohl’s is built on a strong and successful foundation. But we’re not finished. We have many more exciting opportunities ahead. That’s why you can continue to expect great things from Kohl’s!
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