Kohl’s to Enter Boston Market with 13 Stores.

Knight Ridder/Tribune Business News March 21, 2002 By Chris Reidy, The Boston Globe Knight Ridder/Tribune Business News Mar. 21–There are glitzy department stores and huge no-frills discount stores — and then there is Kohl’s, a Wisconsin-based chain that seeks to offer some of the best of both worlds.

Although department stores are wall-to-wall with brand-name clothing, their size can make shopping in them time-consuming. Discounters offer lower prices and more convenience, but their store-brand clothing often fails to impress fashion critics.

To compete with both, Kohl’s Corp. has devised a hybrid store that sells national brands at moderate prices in what the chain says is a more convenient setting. Casual brand-name clothing for the minivan family is one way Kohl’s describes its merchandise. Next month, the chain is planning to launch a major New England initiative by opening 13 stores in and around Greater Boston. this web site kohls coupon codes

In coming to Massachusetts and New Hampshire, Kohl’s has been able to exploit the demise of some regional discount chains. Many Kohl’s sites in the Northeast were once stores for Bradlees and Caldor, two chains crushed by the giant discounters Wal-Mart Stores Inc. and Target Corp.

According to Finard & Co., a commercial real-estate services firm in Burlington, Target had nine stores in Eastern Massachusetts as of late last year, and Wal-Mart had 26. By the end of next month, Kohl’s will have about 420 stores in 32 states, up from 76 a decade ago.

Kathleen Seiders, a professor who was part of a Babson College team that studied the chain a few years ago, said Kohl’s takes some business away from Sears, Roebuck and Co. and J.C. Penney Co.

“Kohl’s also gets some Target customers to trade up to brand-name fashions,” she said.

Target, a self-described upscale discounter that seeks to project an image of cheap chic with its private-label clothing, said it coexists nicely with Kohl’s.

“We are familiar with them,” said Target spokesman Douglas Kline.

“And we often share markets and shopping guests.” Featuring wide aisles, shopping carts with built-in strollers, and centralized checkout lines similar to those in supermarkets, Kohl’s claims to have tailored its stores to the needs of suburban soccer moms.

“We’re filling a niche between discount stores and department stores,” said Kohl’s senior vice president, Stephen Byers.

By giving customers what they want — brands, value, and convenience — the chain has impressed both industry analysts and shoppers. At a time when many chains are struggling, Kohl’s is the “retail darling,” said Finard partner Bill Beckeman.

Lab technician Phyllis Cupero-Grilli might agree. Last month, she drove from her home in Springfield to a Kohl’s in Enfield, Conn., across the state line. “I like the merchandise, especially for the kids,” said the mother of a 7-year-old son and a 3-year-old daughter. “It’s a nice clean store. I wish they’d come to Western Massachusetts.” Wooing both middle-class and upscale customers, traditional department stores are often multilevel affairs in big regional malls. In essence, they are a collection of mini-stores under one roof. There are boutiques for various designers, along with a fragrance and jewelry counters. Each department has its own clerks and cash registers. As a result, a customer buying perfume, a dress, and some earrings may have to make three separate purchases. website kohls coupon codes

Kohl’s, in contrast, prefers smaller one-level stores. And because of centralized checkouts, customers pay for their purchases all at once.

Smaller stores mean fewer items, though. About 80 percent of the merchandise is clothing, shoes, and accessories. Jewelry and fragrance offerings are modest, though customers can buy towels, linens, and small appliances. A man can’t buy a suit at Kohl’s, and a woman can’t buy high-end designer brands. But there are plenty of mid-tier brands such as OshKosh B’Gosh, Levi’s, and Sag Harbor.

“They don’t try to be trendy or hip,” said Russell Jones, a retail consultant for Cap Gemini Ernst & Young. “They sell to Americans who want mainstream brands.” Visiting a big mall to shop at a department store can blow a big chunk out of a consumer’s day. Kohl’s likes to locate its stores in easily accessible strip malls. The store’s “racetrack” floor plan, the grouping of merchandise, the wide aisles, and centralized checkout — everything is designed for self-service hit-and-run shopping.

When entering a new market, Kohl’s strategy is to open several stores at once and put them where suburban mothers on daily errands will find them. “A mother with kids might say, `Let’s go to Kohl’s. It’s on the way,’ ” said Byers.

By opening many stores at once, Kohl’s also gains instant critical mass for its advertising and marketing efforts. On that front, Kohl’s yesterday announced a pledge of $1 million to Children’s Hospital Boston.

Kohl’s stores are neither lavish nor spartan.

“You don’t have to be ashamed to go there,” said chairman Howard Davidowitz of Davidowitz & Associates Inc., a retail consulting firm in New York. “It’s not glitzy, but it’s attractive. You have a two-income family making $80,000 to $90,000 a year, and they’re perfectly comfortable in Kohl’s.” Because of a low-cost structure based on lower rents and staffing levels, Kohl’s claims it’s a “value” retailer offering prices many department stores can’t match.

For department stores, these have been trying times. In a recession, consumers tend to stay away from full-price retailers. And department stores are also dependent on hot fashions, something in short supply lately.

“It’s been a terribly unexciting fashion market for the last 18 months,” said Stewart Cohen, a partner at the Ozer Group, a retail consulting firm in Needham.

Ho-hum fashions, hard times, and consumers too busy to visit big malls have all helped Kohl’s, as well as Wal-Mart and Target, to steal customers from department stores and to outperform many of its rivals.

For fiscal 2001, Kohl’s net income rose 33.2 percent, to $495.7 million. Sales rose to $7.488 billion, a 21.7 percent gain.

Such results recently prompted A.G. Edwards analyst Robert F. Buchanan to upgrade his recommendation on Kohl’s to a strong buy. When Kohl’s arrives in Boston, it will have stores in just over half of the nation’s top 50 markets, he noted.

Because the westernmost Kohl’s is in suburban Denver, there is still plenty of opportunity for the chain to open new stores and to sustain earnings-per-share growth of “20 percent plus” over the next few years, Buchanan wrote in a recent report. During fiscal 2002, Kohl’s plans to open 70 stores nationwide.

Kohl’s may thrive for another reason. Its execution of retail fundamentals, such as having the right items in stock at the right price, has been a model of consistency, analysts said.

In Kohl’s Enfield store, shopper Elaine Derderian was more interested in convenience than Wall Street’s outlook.

“I like all stores,” said Derderian. But what’s nice about Kohl’s, she said, “It’s easy to get in and out of on your lunch hour.” KSS, WMT, TGT, S, JCP, GOSHA, AGE,