Kohl's eyes established brands for home

MILWAUKEE — Kohl's executives focused on the company's financial progress in the 10 years it has been a public company at its annual shareholder meeting here last week.

After the meeting, Jack Moore, executive vp, gmm, told HTT that the chain is evaluating some new brands for the home textiles department, although it is not seeking to establish store-exclusive labels.

"If exclusivity is the primary driver for selecting a brand, I don't know if it's always the right thing to do," he said.

The standards for brand selection are fairly rigid, according to Rick Leto, executive vp, gmm, product development. "A brand has got to have tremendous volume potential for us to entertain the idea of adding it to the assortment," he said.

The Martex brand added earlier this year is performing "very well," Moore said.

"In design, construction and value, the woven top-of-bed has exceeded expectations," he said, adding that Martex producer WestPoint Stevens has clarified the positioning of its brand stable under the regime of ceo Chip Fontenot and president of bed and bath Bob Dale. "Chip and Bob have done a good job of bringing focus and meaning to the brands there."

He also noted that the brand equation in the home textiles field is evolving, pointing out that an established family of industry brands is now going up against a growing collection of licensed brands.

"I think the traditional industry brands have more competition than ever," he said.

New brands have the potential to stake large positions quickly at Kohl's. During the shareholder meeting, president Kevin Mansell noted that Columbia sportswear, which joined the apparel mix in mid-2000, had by the close of 2001 jumped into the company's roster of Top 10 performing brands — a group that generates 20 percent of annual revenues. The Oshkosh brand, added in February 2002, already is headed for a position within the top 20 brands, which collectively produce 50 percent of the chain's $7.5 billion in revenue.

Although private label product makes up 20 percent to 25 percent of the total merchandise mix, Mansell said, "private label is a complement to our brands, not a replacement."

During the meeting, Mansell also noted that the company's store-branded credit card program has been growing steadily. Kohl's now has 6.2 million active accounts, and in 2001 Kohl's card payments accounted for 31.8 percent of sales, he said.

Asked later whether Kohl's would pursue a co-branded card arrangement — similar to the eight-month-old Target Visa program — ceo Larry Montgomery said he sees no advantage in doing so.

"I think we're doing well with what we've got now," he said. "I'm still trying to understand why Target's doing it."