Kohl's Closing 18 Underperforming Stores Case Study

Target Canada is the company’s first international expansion. However, Target’s expansion was not successful, as the company had initially planned for. Therefore, the company will be closing 133 Target Canada stores across the country and lay off approximately 17,600 employees. According to Target’s CEO Brian Cornell, he stated “After a thorough review of our Canadian performance and careful consideration of the implications of all options, we were unable to find a realistic scenario that would get Target Canada to profitability until at least 2021.” Moreover, problems occurred immediately when Target opened up over hundred stores in the first year of its Canadian Expansion. For example, customers complained about the lack of basic goods, prices being too high, and the unavailability of U.S. brands in the stores. It was the start of Target accumulating losses as high as a billion dollars a year. In addition, there was also increasing competition with Wal-Mart being the biggest retailer in Canada. The already intimidating rival lowered its prices in order to fend off Target. Furthermore, Target Corporation’s cash costs to discontinue Canadian operations are expected to be $500 million to $600 million, most of which will occur in the Company’s 2015 fiscal year or later. The Company has sufficient resources to fund these expected costs, including cash on hand and ongoing cash generation by

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

Kohl’s is an American department store, founded by Maxwell Kohl in 1962. In 1946, Maxwell operated his first store which is known as Kohl’s Food Store. After the success of Kohl’s Food Store, he opened his first department store which is Kohl’s Department Store (present). Since that year, it has been operating in the retail industry and it offers clothing, furniture, accessories, electronics, and house ware products. During the 2000s. Kohl’s has expanded nationwide in the United States. Also, Kohl’s is the second largest retail store in the United States. In addition, the target group of Kohl’s are upper middle and upper class individuals especially families.(Gennrich, 2012)

Question 1: What were the rights of Walmart, the employer, during these two organizing drives?

From its humble beginnings as a single store in 1962, Kohl’s has quickly become one of the nation’s largest retailers. Based and headquartered in Menomonee Falls, Wisconsin, Kohl 's is a family-focused, value-oriented, specialty department store offering quality exclusive and national brand merchandise to the customer in an environment that is convenient, friendly and exciting. Currently, Kohl 's operates stores and distribution centers in 49 states. Every year, we continue to build new stores and remodel existing locations to create an inspiring shopping experience. (Kohl’s Corporation, 2013, Press Room).

Kohl’s inventory turnover has improved slightly since 01/31/14 to 01/31/2015, a ratio of 3.17 equals Kohl’s selling and restocking their inventory about 3 times during the year. When comparing these numbers on 10/06/2015, Kohl’s number has gone down. When compared to the industry average, Kohl’s is well below average. Target is also below average, but double what Kohl’s average is.

Kohl’s current stock price is 51.13 as of February 3, 2016. It’s 52 week high is 79.59 and its 52 week low is 41.86. (Reuters)

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 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).

In 1883 Bernard (Barney) Kroger invested 372 dollars that consisted of his life savings to open the first ‘Kroger’ grocery. That first store, located at 66 Pearl Street in downtown Cincinnati, would soon turn into the giant retail chain that consists of nearly 2,500 stores all over the country and most recently produced sales of over 76 billion dollars. Barney Kroger was revolutionary in the formation of the modern grocery, in that he was the first grocer to have his own bakery, as well as selling meat and other groceries all under one roof. Kroger was also the first to manufacture the products that he in turn sold in his own store. This was the beginning of what is today one of the largest food manufacturing companies in America.

Online stores are growing in popularity and drawing attention. Because of this, other retail stores are losing that attention and business. Some major stores include Sears, Radio Shack, JCPenney, Macy’s, Payless ShoeSource, Dillards and more. These are called brick-and-mortar stores. According to www.merriam-webster.com the definition of a brick-and-mortar store is, “a traditional business serving customers in a building as contrasted to an online business” (Brick-and-mortar, n.d.). “It’s possible more than 8,600 brick-and-mortar stores will close their doors in 2017 (…) JCPenney announced plans to shutter 138 stores by July, Payless ShoeSource is closing hundreds of stores, and Macy's said it's shutting down 68 locations” (Wattles, 2017). What a shame to lose these resources and businesses, especially for those who support and appreciate the local retail option.

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.

Wattles, J. (2017, April 22). Stores are closing at an epic pace. Retrieved September 9, 2017, from http://money.cnn.com/2017/04/22/news/credit-suisse-retail/index.html

Nordstrom’s Rack, which has 167 stories at the end of this year, will add an additional 25 stores in 2017. This is certainly a sign that fashion customers are continuing to endorse that company’s low priced effort. They scoop up fashion merchandise, especially shoes, at very discounted prices. Neiman Marcus is now expanding their Last Call stores to compete more aggressively with The Rack.

After closing date of report, the company announced 7 Clive Peters and Rick Hart may close and the rest of 18 stores will be changed into Harvey Norman format. The shutdown of 7 stores is to estimate to incur a charge around $10 million in the financial report of 2012.