Kohl's Sees Opportunity From Merger

By Staff -- Home Textiles Today, 6/6/2005 12:00:00 AM

Menomonee Falls, Wis. —

The merger of Federated Department Stores and May Co. should create greater market share opportunity for moderate retailers, according to Kohl's chief.

“When you look at Federated's approach to more private label and trading up and out of the moderate level, and then they're going to bring May in, I think there's an opportunity there for sure,” chairman and CEO Larry Montgomery told investors at a Sanford C. Bernstein & Co. conference last week in New York.

Montgomery's presentation broke no new ground, but provided an update on Kohl's on-going projects for 2005.

Kohl's improved merchandising set — which will include highlight trend signage throughout the store and improved productivity of wall space — will hit stores early in the back-to-school cycle, during early August, Montgomery said.

He also touched on Kohl's small store strategy, which launched in 2002 to serve trade areas with populations of 100,000 or less. The company is opening six of the approximately 68,000-square-foot units this year, which will bring the total number to 10 by the end of 2005.

Also last week, the company announced that home and accessories were sales leaders last month. The company reported a May sales increase of 10.2 percent. Comps rose 0.2 percent.

The performance was in line with company expectations. Kohl's reiterated its comp target for the second quarter of 4 to 5 percent, which would require comps in June and July in the mid single-digit range. It also reaffirmed earnings guidance for the period of 49 cents to 52 cents per diluted share.