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Fashion-forward sends Kohl’s forward—fast


When it comes to apparel merchandising at Kohl’s, exclusivity is the name of the game. Once associated with a somewhat dowdy offering, Kohl’s has revamped and elevated its selection of apparel and home products over the last two to three years primarily by adding big name, exclusive brands into its mix.

The change began in earnest three years ago, when the company first introduced exclusive, trend-right product from former MTV television host Daisy Fuentes. This was followed the same year with stylish career wear from proprietary label apt. 9, juniors’ apparel from Bongo and young men’s apparel from Urban Pipeline. In 2005, the company followed these introductions by bringing in big name national brands like Candie’s and Chaps. In the past year, Kohl’s has introduced an exclusive young men’s line from skateboarder Tony Hawk, as well as a licensed contemporary line for women from ELLE magazine.

“For Kohl’s, there are four elements to success with regard to building an exclusive brand,” said Deborah Weinswig, a senior retail analyst with Citigroup, in a report. “First, a world class partner; second, something that will resonate with the customer; third, something scaleable; and fourth, a brand they can expand across all businesses (i.e. apparel into home). We have been very impressed with the company’s ability to replicate this success in multiple exclusive brand launches.”

Kohl’s has experienced success in pushing more fashion-forward and contemporary merchandise. In May, Kohl’s reported a 3.9% comparable-store sales increase for the first quarter, which the company attributed to the momentum gained by new brands like the Hawk and ELLE lines. The ELLE line has done so well, in fact, that Kohl’s bumped up the number of stores where the line sells to 500, up from the original 300 stores it was featured in when the line launched earlier this spring. The ELLE brand will eventually sell in all stores.

“The launch of the ELLE brand demonstrates our speed to market success with new partners, allowing us to bring young women contemporary, runway-inspired fashions several months faster than ever before,” said Kevin Mansell, Kohl’s president.

ELLE, Tony Hawk, Candie’s, Daisy Fuentes, Bongo and other fashion-forward exclusive brands have all set the stage for Kohl’s biggest fashion launch yet. This month, Simply Vera by Vera Wang will launch into Kohl’s across apparel, accessories and home fashion. The apparel line will feature some of Kohl’s highest price points yet.

According to published reports, the new line will include items such as a $138 car coat and a $98 jacquard bubble skirt, compared to the $60 to $100 coats and the $30 to $44 skirts that typically sell at Kohl’s.

KOHL’S CORP.Source: Company reportsFor fiscal year ended Feb. 3, 2007
HEADQUARTERSMenomonee Falls, Wisconsin
2006 SALES$15.54 billion
2006 EARNINGS$1.82 billion

Will high-end fashion and steeper price points intimidate the loyal Kohl’s shopper who typically shops at its stores for discounted or more moderately priced clothing? When Kohl’s initially announced a partnership with Wang, investors feared exactly that. But more recently, analysts have suggested that Kohl’s has done its homework on the Wang line, and that investors’ initial assumptions were wrong.

“Kohl’s conducted a significant amount of consumer research for the Vera Wang product line,” Weinswig said. “As such, we believe that investor fears regarding the product line being too fashion-forward [for Kohl’s customers] are overdone.”

To help prepare for the Vera Wang launch, as well as an exclusive housewares line from the Food Network, Kohl’s established a Manhattan design office in January. This new presence will help the retailer gain even more of a competitive edge, both as it launches Vera and Food Network this month, and in the future when it seeks out the hottest new brands to bring in as exclusives.

“We wanted to open a design office…so that we could be closer to Vera [Wang] and the Food Network,” said Peggy Eskenasi, evp of product development for Kohl’s. “To maintain this relationship, it was a necessity that we have people…in New York communicating back to our home offices in Wisconsin.”

Despite associations with fashionable names like ELLE and Vera Wang, and having a design office in New York City, Kohl’s has not forgotten about its loyal customers who are more traditional when it comes to purchasing apparel and home items.

As the company moves forward, the goal will continue to be to bring in products from “world class partners” that appeal to everyone, whether she’s a grandmother who prefers wearing turtle necks and loafers, or a single twenty-something who’s on the lookout for the hottest new handbag. No matter who the shopper is, the goal will be to bring in exclusive product that makes her want to shop at Kohl’s.

“We brought in the Chaps exclusive for more of that classic customer,” Eskenasi said. “What we’ve been trying to do with Vera, Food Network and all of our exclusive brands, is to try to make Kohl’s a destination. If she wants Vera, she’ll come to us; if she wants Candie’s, she’ll come to us; if she wants Chaps or the Food Network, she’ll come to us. We’re creating alliances with world class brands that people know and recognize.”

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