Give Kohl's (NYSE: KSS) credit for bravery. The Wall Street Journal reports (subscription required) that in the midst of a consumer slowdown that few observers believe will turn around anytime soon, the company opened 46 new stores. Today. CEO Kevin Mansell told the newspaper that "We've been in a period now for over a year where the customer is shopping less. You'd better start figuring out how you're going to take more from the other guy."I like the way Mr. Mansell thinks. While competitors are battening down the hatches and closing stores, Kohl's is making an aggressive move to take market share. In addition, the company may be able to negotiate more favorable leases for new stores right now and when economic conditions rebound, as they always do, the company will be well-positioned.
Too many companies over-invest when times are good and then cut back when times get tough. That "buy high, sell low" strategy is the exact opposite of what works, and it's what's gotten the housing industry in so much trouble. Think about it: banks would lend money to anyone when homes were overpriced and now that bargains are available, you can't get a mortgage.
Kohl's strategy may not yield great results in the short-term, but it looks smart to me.
Reader Comments (Page 1 of 1)
10-02-2008 @ 8:37AM
b. busbee said...
The new store in The Villages Fl. opened this week and is already laying people off, so much for their stratagy!
10-02-2008 @ 9:56AM
Robert said...
Smart move. When under "attack" do what the competition wouldnt expect, "turn and attack" ! Good move KOHLS. Now GM, Ford & Chrysler need to follow.
10-02-2008 @ 9:58AM
Thom A.P. said...
When opening a new store, you need an overly full staff for all the short term extra biz. Unfortunate for the worker, though highly beneficial to the employer, this strategy lets you weed out those whom you may have hired that just can't cut it... Expansion, definitely a GREAT move for Kohl's.
10-02-2008 @ 11:38AM
Kevin said...
Wal-Mart is all we can afford here in Cuyahoga County (Cleveland), Ohio after we pay our outrageous taxes to our crooked politicians and career welfare recipients living here.
10-02-2008 @ 11:59AM
paddy said...
we small retailers put them in business in the first place, and now that they don,t sell the items any more ,they give them as buy-out at a fraction of what they cost us , us sucker have to pay full price for them, i have one of the big box store
right next door to me, and they are ruining
my business. so they can afford to buy other stores, i,m happy when a store dose good, but not when it is ruining my business ,that i have worked 12to 16 hours a day, building up. thank you paddy
10-02-2008 @ 12:06PM
Dorothy said...
Boy, our taxes here in St. Louis are ridiculous too! When I got my personal property tax bill I thought it was for my house! So, you end up paying $30K for that 20K vehicle you bought after owning it for 15 years because of all the tax you pay on it! What a big rip off!