KOHL’SKOHL’SExpect Great ThingsExpect Great Things®®

A BA495 Presentation By:A BA495 Presentation By:

Bret Overbaugh,Bret Overbaugh,Shayna OverbaughShayna Overbaugh

AndAndNick PhillipsNick Phillips

Fall 2006Fall 2006

A Short History of KOHL’SA Short History of KOHL’S

19621962 - Kohl's opens its doors with its first store - Kohl's opens its doors with its first store located in Brookfield, WI.located in Brookfield, WI.

19861986 - Kohl's is purchased by a group of investors led - Kohl's is purchased by a group of investors led by Kohl's senior management. The company opens its by Kohl's senior management. The company opens its 40th store. 40th store.

19921992 - Kohl's offers 11.1 million shares of the - Kohl's offers 11.1 million shares of the company's stock to the public in one of the largest company's stock to the public in one of the largest initial public stock offerings ever made by a initial public stock offerings ever made by a Wisconsin company. Wisconsin company.

A Short History of KOHL’SA Short History of KOHL’S

19981998 - Kohl's joins the S&P 500 - Kohl's joins the S&P 500 19991999 - Kohl's Corporation reports its fourth - Kohl's Corporation reports its fourth

consecutive year of earnings growth over 30%.consecutive year of earnings growth over 30%. 20002000 - Kohl's opens 60 stores to operate 320 - Kohl's opens 60 stores to operate 320

stores in 26 states by year-end.stores in 26 states by year-end. 20032003 - CEO Larry Montgomery becomes the - CEO Larry Montgomery becomes the

chairman of the board of directors.chairman of the board of directors.

A Short History of KOHL’SA Short History of KOHL’S 2004 - 2004 - Kohl's opens 95 stores including five new Kohl's opens 95 stores including five new

markets in California, making it the company's largest markets in California, making it the company's largest state with a total of 62 stores. By the end of fiscal state with a total of 62 stores. By the end of fiscal year 2004, customers are shopping at Kohl's in 40 year 2004, customers are shopping at Kohl's in 40 states through 637 stores.states through 637 stores.

2006 - 2006 - Kohl's opens 85 new stores, including its Kohl's opens 85 new stores, including its expansion into the Northwest. Kohl’s is now at 732 expansion into the Northwest. Kohl’s is now at 732 total stores. In Oregon 9 new stores are planned by total stores. In Oregon 9 new stores are planned by 2007. Currently 4 are open in Portland/Vancouver 2007. Currently 4 are open in Portland/Vancouver and one in the Eugene/Springfield area.and one in the Eugene/Springfield area.

FutureFuture – Kohl’s expects to reach 1,232 stores by – Kohl’s expects to reach 1,232 stores by year’s end 2010.year’s end 2010.

Would I Know A Kohl’s If I saw Would I Know A Kohl’s If I saw One?One?

Kohl’s operates stores in three settings:Kohl’s operates stores in three settings: The Stand-AloneThe Stand-Alone

((Plover, WIPlover, WI))

The Big Box MallThe Big Box Mall

((Gateway Center - Springfield, ORGateway Center - Springfield, OR))

The Lifestyle CenterThe Lifestyle Center

((Bella Terra - Huntington Beach,CABella Terra - Huntington Beach,CA))

KOHL’S Mission StatementKOHL’S Mission Statement

To be the leading family-focused, value-To be the leading family-focused, value-oriented, specialty department store oriented, specialty department store offering quality exclusive and national offering quality exclusive and national brand merchandise to the customer in an brand merchandise to the customer in an environment that is convenient, friendly environment that is convenient, friendly and exciting.and exciting.

Some Basic FactsSome Basic Facts Kohl’s Target MarketKohl’s Target Market – – “A two-income family “A two-income family

with kids at home. They don't have a lot of time, with kids at home. They don't have a lot of time, and they are looking for value.” – CEO Lawrence and they are looking for value.” – CEO Lawrence Montgomery Montgomery

Kohl’s Marketing MixKohl’s Marketing Mix – – 32.6% Women’s32.6% Women’s18.6% Men’s18.6% Men’s18.4% Home18.4% Home13.4% Children’s13.4% Children’s 9.2% Accessories9.2% Accessories

Some Current StatisticsSome Current Statistics

20052005 Net Sales = $13.4 Billion. Up 14.5 % Net Sales = $13.4 Billion. Up 14.5 % 1995-20051995-2005 ROI Annual rate 22.2% ROI Annual rate 22.2% 1995-20051995-2005 Earnings per share annual growth Earnings per share annual growth

rate 25.7%rate 25.7% Ranked 166Ranked 166thth on Fortune 500, up from 168 on Fortune 500, up from 168thth the the

previous year.previous year.

Figures from Kohl’s Corp. 2006 Form 10-KFigures from Kohl’s Corp. 2006 Form 10-K

Kohl’s National SWOT AnalysisKohl’s National SWOT Analysis StrengthsStrengths

Balanced Brand MixBalanced Brand Mix Robust Distribution NetworkRobust Distribution Network Strong ProfitabilityStrong Profitability

WeaknessesWeaknesses Weak Presence in Key MarketsWeak Presence in Key Markets Low comparable store sales growthLow comparable store sales growth

OpportunitiesOpportunities Store ExpansionStore Expansion Growth in Private Label ProductsGrowth in Private Label Products

ThreatsThreats Industry ConsolidationIndustry Consolidation Increasing Rental RatesIncreasing Rental Rates Weakening Consumer SpendingWeakening Consumer Spending

Results provided by DATAMONITOR – July 2006Results provided by DATAMONITOR – July 2006

Kohl’s Springfield SWOT AnalysisKohl’s Springfield SWOT Analysis StrengthsStrengths

Strong brand mix – Private label and nationally known brandsStrong brand mix – Private label and nationally known brands Clean appearance – Well designed/good layoutClean appearance – Well designed/good layout Good highway (I-5) access in expanding area of townGood highway (I-5) access in expanding area of town

WeaknessesWeaknesses New to market area and the northwestNew to market area and the northwest At edge of the mall, away from core and food courtAt edge of the mall, away from core and food court

OpportunitiesOpportunities Growth potential with new highway interchangeGrowth potential with new highway interchange New businesses locating in area to provide more trafficNew businesses locating in area to provide more traffic Sears is moving away from clothing, opening more opportunity for Sears is moving away from clothing, opening more opportunity for

salessales

ThreatsThreats SearsSears TargetTarget Valley River CenterValley River Center

Community InvolvementCommunity Involvement

US Youth Soccer Sponsorship

Children's Hospital Partnerships

ResourcesResources

BusinessWeek On-Line – Q&A with Kohl’s BusinessWeek On-Line – Q&A with Kohl’s Lawrence MontgomeryLawrence Montgomery

DATAMONITOR – July 2006 Kohl’s SWOT DATAMONITOR – July 2006 Kohl’s SWOT AnalysisAnalysis

Kohl’s website Kohl’s website Fortune – Fortune 500 for 2006Fortune – Fortune 500 for 2006 Google ImagesGoogle Images