A week after the company rejected downtown Milwaukee as a possible site for its future corporate headquarters, Menomonee Falls-based Kohl’s Corp. announced fourth quarter net income of $455 million, which was down 8 percent from $494 million in the fourth quarter of the 2010 fiscal year. The retailer’s quarterly net sales dipped 0.3 percent to $6.02 billion.
For all of fiscal 2011 the company’s net income increased 4 percent to $1.167 billion and its net sales were up 2.2 percent to $18.8 billion. But those results were not satisfactory to the company’s executives.
“Overall we were disappointed in our performance last year,” chief executive officer Kevin Mansell said.
Some Milwaukee commercial real estate sources say Kohl’s executives have decided to put the company’s new corporate headquarters project on hold while they address concerns about the company’s main operations. The company’s current headquarters in Menomonee Falls is cramped and executives have considered plans to build a new 1 million-square-foot complex. Kohl’s executives spent months considering a site in the Park East corridor, but recently said it is no longer considering downtown Milwaukee for the project.
In a conference call with analysts last week, Mansell and chief financial officer Wes McDonald made no reference to the company’s plans to build a new corporate headquarters. Kohl’s executives are not commenting publicly on the headquarters project, other than the recent official statement about dropping downtown Milwaukee from consideration. That statement also indicates that no site decision has been made. In addition to downtown Milwaukee, the company has considered plans to build a new headquarters in Menomonee Falls.
“While we are no longer considering sites within the city of Milwaukee, we continue to explore all of our options,” the company said.
During the conference call last week, Mansell said that Kohl’s executives are happy that the company’s ecommerce sales have grown to more than $1 billion, but they are concerned about the performance of its brick and mortar stores. Comparable store sales decreased 2.1 percent in the fourth quarter and posted a modest 0.5 percent increase for the year.
“We weren’t excited about the deterioration in our brick and mortar stores,” Mansell said. “We need to improve across the whole store. There needs to be improvement everywhere.”
“2012 is a lot about focusing on our existing business and making it a healthier business,” Mansell said. “There is a tremendous amount of focus on correcting deficiencies in our business. We’re trying to approach it from all aspects.”
The company opened 40 stores in 2011 and now has a total of 1,127 stores. The company also remodeled 100 stores last year. The company plans to open 20 stores this year and is working on a new store layout prototype.
Kohl’s also plans to complete construction of a 950,000-square-foot distribution center this year in Texas.
