Retailer News / News

Kohl’s Work On Private Label Paying Off

February 28, 2013

Kohl’s announced earnings for 2012 this week and said that the retailer’s private and exclusive brands have shown strong growth in the past year.

The retailer reported full year sales rising 2.5 percent for 2012, including a 5.4 percent rise in the fourth quarter from a year ago. Nearly half of that fourth-quarter sales total came from its private label program.

“From a brand perspective, 48 percent of our fourth quarter sales were private and exclusive Only-at-Kohl's Brands, an increase of approximately 30 basis points over the fourth quarter of 2011,” CEO Kevin Mansell told analysts on a conference call, according to transcripts from Seeking Alpha. “The increase was a result of our newer exclusive brands, Jennifer Lopez, Marc Anthony, Rock and Republic, DesigNation and Vera Wang, as well as strong sales in more mature brands such as Chaps, Lauren Conrad, Vera Wang and FILA Sport.”

Mansell said in response to a question that the increase was the result of work over the past three years, and that more work in the program was coming, including a focus on additional staff.

“As you know, we've expanded the number of private and exclusive brands a lot over the last three years. What's happened as a result of that, of course, is that there has been some redundancy, and things that are carried in one of our private exclusive brands sometimes show up as well in another,” Mansell said, according to the Seeking Alpha transcripts. “So we want to definitely eliminate that. That was part of our effort in our reorganization. Adding new talent and new leadership into private and exclusive brand product development; organization is going to help us do that.”

That should provide Kohl’s with “unique” opportunities along the way.

“Obviously, a very large percentage of our businesses comes from our own private and exclusive brands,” Mansell said. “I mean, it is definitely one of the strategies that we thought that was really important for us to drive over the last five years, because we just anticipated that transparency in pricing was just going to grow. And more and more, we need to be unique in our offerings.”

Mansell also said that the company would use its marketing to reenergize the brand, providing a “more balanced presentation” between its private label products and national brands in broadcast and circular ads.

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