Kohl's Changes Its Tune

Milwaukee —

Kohl's will revamp the home department later this year, introducing a new layout and some new brands across soft and hard categories.

“Going into back-to-school and holiday, you are going to see a significant change,” Chairman and CEO Larry Montgomery said following the retailer's annual meeting here last week.

Montgomery declined to elaborate on the changes. But he noted that Chris Capuano —who joined the company from Federated last fall as executive vice president and general merchandise manager for home and footwear — brings to the party a taste level that should result in some “very exciting” changes for the department.

Montgomery also assessed the competitive situation — both in terms of the consolidating retail scene and in the efforts by rivals Sears and JCPenney to open more off-mall locations.

JCPenney plans to open 20 new stores this year, most of them off-mall. Sears later this month kicks off the conversion of Kmart units to the free-standing Sears Essentials format, which is expected to number some 500 units over the next several years.

Montgomery pointed out that Kohl's will roll out more new stores this fall than the JCPenney and Sears freestanding openings for 2005 combined, indicating that neither will have the critical mass to be truly competitive off-mall for some time.

As for the consolidating retail landscape — the Sears/Kmart and Federated/May mergers, in particular, Montgomery said Kohl's is not shopping for a deal of its own. Instead, it expects to pick up some store locations in the aftermath of the transactions.

“We would expect something to shake loose,” he said. “It has for every year of the 18 years I've been here.”

In the meantime, Kohl's is working on broadening its brand marketing approach. The company has begun advertising on the Internet and is looking at more advertising in consumer magazines. Last fall, for the first time, Kohl's held a spring apparel line preview in New York for long-lead publications, a tactic it plans to repeat this year in advance of the fall fashion rollout. The company has also begun doing more sophisticated direct mail pieces, such as the Spring Fashion Guide it released earlier this year.

“The weekly circular is still our primary (advertising) vehicle,” Montgomery said. “But we're trying to find ways to expand our reach.”