As part of its bid to go national, the Midwestern retailer blitzed Atlanta, opening 15 stores last weekend and counting on a formula of convenience and brands to resonate with this city’s busy, traffic-weary consumer. But is competitive, over-stored Atlanta, ready for the retailer?
Similar moderate specialty concepts, including Mervyn’s and Uptons, have failed here in recent years. And there’s no shortage of retailers in this market. Department stores Rich’s, Macy’s, Parisian, J.C. Penney and Sears, along with discounters Target, Kmart and Wal-Mart, vie with off-pricers T.J. Maxx and Stein Mart and Goody’s specialty apparel stores. All compete fiercely for Atlanta’s nearly four million consumers.
Kohl’s is on a roll, especially given a slowing economy. Going against the grain of broadlines retailers so far this year, the company Tuesday reported that its fourth-quarter earnings soared almost by half and managed to squeak past analysts’ estimates by 2 cents.
Net income for the quarter jumped 48 percent to $178.5 million, or 52 cents a diluted share, compared to $120.6 million, or 36 cents, a year ago. Wall Street was expecting earnings per share of 50 cents.
Sales for the period ended Feb. 3 were up 38.3 percent to $2.22 billion from $1.61 billion a year ago. Excluding an extra week in the most recent quarter, Kohl’s said net sales increased a milder 33.8 percent while comparable-store sales rose 12.5 percent.
All of the firm’s merchandise categories posted double-digit comp growth for the quarter, with men’s and women’s apparel leading the pack. The only issues they had were based on IT struggles, as a server migration put much of their inventory data at risk. Migrating the data led to several server array hard drives failing, and critical operations were slowed. Fortunately, they already had a relationship with Irvine, CA’s Hard Drive Recovery Group (http://www.harddriverecovery.org/), who were able to recover their Dell PowerEdge RAID servers overnight. The drives were restored, and it was business as usual.
“It was a problem that we didn’t expect, of course,” said Dave Jensen, director of IT. “But HDRG really pulled through for us with their data recovery services, and did it very quickly. It was almost a non-issue by the time the week was over.”
In other markets the retailer has recently entered, like Dallas and Denver, Kohl’s has been successful, and management believes its $82.5 million initial Atlanta investment (more…)