Kohl’s keeps rolling, but slower growth on horizon

MENOMONEE FALLS, WIS. —Kohl’s achieved a significant milestone earlier this month with its arrival in another new market and the opening of its 1,000th store.

The company opened 46 stores in early October, including seven units in the southeastern Florida counties of Dade, Broward and Palm Beach. Nine more stores are planned for communities elsewhere in the state.

If opening 46 new stores on a single day sounds like a lot, that’s because it is. However, it pales in comparison to October 2007, when Kohl’s set a company record by opening 80 stores on a single day and then opened an additional 15 units in November. In 2007, Kohl’s had a record year for expansion as it opened a total of 112 new units and indicated it would have 1,400 stores by 2012. That isn’t likely to be the case now as the company, along with virtually every other retailer, has moderated its growth plans due to economic weakness and future uncertainty.

This year, even with the 46 recently opened stores, Kohl’s expects to open a total of 75 units and next year, a further deceleration in store growth is planned with only 50 new stores scheduled. Beyond those 50 stores, Kohl’s isn’t elaborating on the pace of new store expansion beyond 2009, although the company remains confident in the potential for 1,400 stores even if the time frame in which that target will be achieved has been extended.

Even if Kohl’s wanted to maintain a more robust pace of growth, it would be hard pressed to do so as developers of malls and shopping centers have delayed starting new projects or have more slowly brought projects under construction online.

Kohl’s slowdown follows four consecutive quarters of declining same-store sales and transitions to new senior executive leadership. Longtime chairman and ceo Larry Montgomery recently announced plans to retain his role as chairman, but will hand over ceo responsibilities to Kohl’s president and 26-year veteran Kevin Mansell. In his new role, Mansell assumes responsibilities for the development and execution of strategic initiatives, day-to-day operations, finance and Kohl’s long-term growth plans. Mansell will maintain his existing responsibilities for product development, logistics and store planning.