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Kohl's Opens Stores; Launches New Collection

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Specialty departmental store Kohl’s Corporation (KSS - Free Report) recently announced the opening of three new stores, one each in Hyannis, Mass.; Keene, N.H. and Michigan City, Ind. These stores have created 375 jobs across the nation and raised the total store count to 1,158 stores across 49 states.

In addition, Kohl’s has plans to remodel 30 locations in the fall of 2013, of which the company has completed remodeling of 10 locations in August and expects to complete the remaining by the end of Sep 2013.

Kohl’s new stores are well-designed and provide a number of features including updated checkout stations, newly designed shopping carts and strollers, larger customer service area, Wi-Fi, upgraded fitting rooms and many more. Kohl’s Michigan City store will receive Leadership in Energy and Environmental Design (LEED) certification, thereby enabling Kohl’s to use more than 20% recycled and 20% regionally sourced building materials, cool white ENERGY STAR-rated roofs and water-efficient landscaping and plumbing fixtures. The store in Hyannis will have one electric vehicle (EV) charging station with two parking spaces available free of cost.

In a separate development, Kohl’s announced that it will now showcase the new collection from the famous U.S. designer Catherine Malandrino under the concept DesigNation. The collection will also be available on the company’s website and in its stores. Inspired by her recent trip to Paris, Catherine Malandrino’s collection will feature apparels especially for women. The retail prices of these apparels will range from $36 to $130.

Kohl’s concept collection DesigNation features an exclusive line comprising clothes from premier designers. The limited-period collection is inspired by various international destinations, with a different designer for every new collection launched. The collection was introduced in fall 2012 with designer Narciso Rodriguez followed by Derek Lam. Catherine Malandrino is the third designer associated with Kohl’s DesigNation concept. We believe that the DesigNation collection is expected to offer customers with more fashion options and drive top-line growth for the company going forward.

Kohl’s new stores are expected to help garner additional business in the upcoming holiday season. We believe that this time Kohl’s is gearing up for the upcoming holiday season well in advance and plans to hire more than 50,000 associates for its 1,158 stores . This shows the company’s efforts to provide the best shopping experience to its customers, which in turn will boost sales.

While we are impressed with Kohl’s initiatives to capitalize on the all-important holiday season for retailers, Kohl’s dismal second-quarter earnings and narrowed earnings guidance for the full year concern us. We continue to be bearish till the company’s new initiatives start paying off. Kohl’s holds a Zacks Rank #4 (Sell).

Other retail stocks, which have been performing well, include Haverty Furniture Cos. Inc. (HVT - Free Report) , Kirkland’s Inc (KIRK - Free Report) and Fortune Brands Home & Security (FBHS - Free Report) . While Haverty and Kirkland’s hold a Zacks Rank #1 (Strong Buy), Fortune Brands carries a Zacks Rank #2 (Buy).

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