Kohl’s Corporation Financial Analysis
American retailer Kohl’s has become a prevalent fixture for the purchase of discounted clothing and home goods in the mid-west for over twenty-five years. The history of the company however has roots much more modest than present day market dominance would suggest. Dating back to a Wisconsin supermarket in 1946, founder Max Kohl grew his small business to the most successful chain of supermarkets in the Milwaukee area (12). By 1962 Kohl opened his first department store in Brookfield, Wisconsin where an eclectic selection of merchandise, from sporting goods, motor oil and candy, was sold (11). In 1972, the Kohl’s Company which by then consisted of 50 grocery stores, six department stores, three drug
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By 2011, Kohl’s corporation reported 1097 stores and a net income of 1.1 million dollars. (12)
Since its first public offering, Kohl’s Corporation has shown steady growth and strong profits and much of that is a result of exclusive and private brands, ability to embrace technological changes and carefully adjusting its business model to changing customer expectations.
The launching of Kohls.com in 2001 has resulted in steady sales growth in the e-commerce portion of the company. To support the internet sales, a 940,000 square foot distribution center was opened in 2001 and a second one was opened in 2010. As internet sales continued to increase to more than 50% of its previous years sales, a third distribution plant has been acquired in Edgewood, Maryland (16). The new facility is 602,000 square feet but Kohl’s plans to expand the building to more than 1 million square feet by 2012. (15). This would indicate that Kohl’s intends to continue expanding the e-commerce portion of the corporation and is making all necessary preparations to support the growth.
In March of 2011, Kohl’s also announced its plans to remodel 100 stores, an 18 percent increase from 2010 (18) leading to speculation that Kohl’s may be trying
They closed 122 stores in 2014 and plan on closing another 50 to 75 in 2015. The annual report does say they plan on opening a number of new store in 2015 but does not give a number. They also say they are planning on renovation store but again list no number as to how many. They have invested in technology to improve their supply chain and productivity. It also implies they will be cutting hours for employs to save
Kroger’s corporate strategy consists of continuously innovating and creating new ways of bring value to the customer. They were pioneers for many of the things that we now consider norms in grocery stores. In the past, Kroger had rapidly expanded to many store locations to gain market share. This expansion strategy caused them to lose profits in
Stephen B. Huttie, president of Wooster-based Crown Retail Consultants, said nationally, the retail industry is “over-stored.” So, the news about Kohl’s closing stores is not surprising. Wal-Mart Stores Inc. closed 154 stores in the United States in
This chain is one of the 20 largest retail stores in the United States. Kohl’s is also listed in Fortune 500 in 2012. This retail store has more than 1100 locations around the globe. It also has a strong reputation and distribution. Also, their revenue performance and financial stability is high. Kohl’s also offers most of the essential products like clothing, furniture and etc.
Together the two heads of JCPenney (JCP) originated from successful corporations and are currently fuelling such achievements into JCPenney. JCP’s restructurment occurred in February 2012 and has changed the assessing arrangement inside the store. The store has been imparted a new style with changes in marketing, rating, store location and administration. All of these variations have been developed to improve the company’s performance.
The industry we have chosen is the department store-retail industry. Within this industry, we have chosen the department stores of JCPenney and Macy’s. We find this industry, as well as these two companies, interesting from a strategic perspective. JCPenney has recently undergone a massive strategic restructuring in regards to its pricing, brand offerings, and store layout, pushing it away from the typical department store strategy of discounts and coupons. Its new strategy has become much closer to Wal-Mart’s strategy of every day low prices. Macy’s, on the other hand, has restructured with a push from the economic
According to the Kroger business web page, in 1883 Barney Kroger invested his life savings of $372 to open a grocery store at 66 Pearl in downtown Cincinnati. The son of a merchant, he ran his business with a simple motto: Be particular. Never sell anything you would not want yourself. It is a motto that has served him well for the next 120 years. Today, Kroger has grown to 2500 stores with $70 billion revenues, 40 food processing plants ranging from bread, milk, soda pop, ice cream and peanut butter. Kroger operates under two dozen banners, has acquired warehouses, trucking companies, and has over 14,400 private-label items (The Kroger Co., 2012).
This is the report I did on Kohl’s. The Financial Statements that I used were from January 31, 2015 and February 1, 2014.
The intensity of rivalry and the threat of substitutes are strong components for J.C. Penney to consider as they continue to strive for increased revenue and market share. Their two primary competitors are Macy’s and Kohl’s, both of whom have fiercely competitive strategies to be strong retail operations. For instance, while Macy’s offers a multitude of promotional deals and is working hard to choose products based upon demographics and geographic segmentation, Kohl’s is attempting to reduce their inventory levels and improve their marketing strategies in order to become a stronger competitor in the department store segment of the retail industry. In order to compete with their competitors, J.C. Penney aims to focus on their previously successful promotions and home department segmentations by bringing in new reputable designers in order to attract a larger customer base. Due to the fact that the intensity of rivalry and threat of substitutes are both moderately strong in the retail department store industry, J.C. Penney ought to be diligent in their implementation of strategies in order to achieve success in the retail business.
The Kroger Company uses the broad differentiation strategy. They have business in at least eight different market segments. They operate two thousand, two hundred and fifty-five stores across America and operate under twenty four banners. Their market position ranks among the highest in the nation. They also have a strong bargaining power because of their many endeavors into different market areas. Kroger supermarkets have been in business for one hundred thirty four years and have made a substantial contribution to the business world (Annual report, 2017).
Kroger values customer opinions which is why today Kroger Co. consists of “2,800 stores in 35 states” with annual sales that equate to about 115.3 billion dollars (“Our History”). Due to their expanding business, Kroger is one of the “world 's largest
In the ever-evolving world of manufacturing and marketing, companies are required to adapt to maintain relevancy or remain competitive. Adaptation techniques in business includes inventing a completely new product, revolutionizing an already existing product, or merging with an existing powerhouse company to extend the reach of one’s services and/or products to a larger customer based globally or domestically. Kohl’s has stood the test of time for over 70 years and has maintained relevancy with its customers by consistently reinventing itself to keep up with the needs of the consumers.
The Kroger brand was born in 1883, Bernard 'Barney ' Kroger took his life savings of $372 to open his first store in downtown Cincinnati. This location is by I-71 that passes the Great American Ballpark. Barney Kroger, the son of a merchant, had a simple "Be particular. Never sell anything you would not want yourself." This was the credo that would serve The Kroger Co. well over the next 130 years as the supermarket business evolved into a variety of formats aimed towards satisfying the needs of their shoppers in as many aspects as possible. With nearly 3,619 stores in 34 states under 24 different names, such as Kroger, Dillons, Turkey Hill Minit Markets, Ralphs, Tom Thumb Food Stores, QuikStop, Fred Meyer Jewelers, and Littman Jewelers with an annual revenue of more than $70 billion. Kroger today ranks as one of the nation’s largest retailers.
In the early 1990’s, Kmart tried to improve on their image by introducing a new logo. Then, they begin remodeling their stores so that they can begin to offer exclusive merchandise to help and improve on sales. Kmart then introduced the Big Kmart which offered full service grocery store and general merchandise. However, Kmart profitability and sales peaked due to other competition. Even though, Kmart maintained a high dividend, which it reduced the amount of money remaining to continue to improve its stores. The business analysts faulted the corporation for failing to create a coherent brand image.
Management is a key to success, and Kmart needs proper management to help create a positive image that attracts more customers. Kmart’s disorderly management and bankruptcy caused many customers to shop with other retailers. According to Carr, Wal-Mart and Kmart were the same size in 1990. Since then, Kmart has grown far slower than its rival or the industry. Once one of the largest discount retailers, Kmart filed for the biggest Chapter 11 bankruptcy for discount retailing in the United States (2002). Struggling to find the right type of management has been one of Kmart’s problems that ultimately helped lead the company to its downfall. Kmart is constantly changing CEO’s, and thus focuses. Kmart has had four