Retailer Quietly Plans California Expansion

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Retailer Quietly Plans California Expansion

By SHELLY GARCIA

San Fernando Valley Business Journal

Kohl’s Corp., the large Midwestern discount dry goods and home furnishings concern, plans a major push into the L.A. market despite the darkening retail landscape.

The company has completed or is close to completing at least four local deals as part of a 30- to 35-store rollout planned for the spring of 2003.

The Menomonee Falls, Wis.-based discount chain has deals pending in Moorpark and Simi Valley, along with locations in the Conejo Valley, Ventura and the South Bay, according to real estate sources.

Several weeks ago, the company paid $1.9 million to acquire 60 acres at the former Norton Air Force Base in San Bernardino for a 650,000-square-foot distribution center it will build to service its Southern California operation.

Dave Fantle, a spokesman for Kohl’s, said it was premature to discuss the California openings. “We have announced we’re coming in 2003,” he said. “Until we get somewhat closer, these things are not confirmable.”

Kohl’s has followed a strategy of opening multiple locations in a market simultaneously and is expected to do the same in the California market. The process appears to be furthest along in Moorpark, where Zelman Development Co. is under contract to acquire the property for Moorpark Marketplace and winding through the entitlement process.

“They have their prototype store, so my guess is they’re looking in new locations,” said Ben Reiling, president of Zelman Development. Kohl’s has signed a letter of intent for a build-to-suit lease at Moorpark Marketplace, a 300,000-square-foot shopping center being proposed by Zelman.

The retail landscape this year is rocky at best. While holiday sales edged up 2 percent, slightly better than feared earlier in the fall, there is general concern about the recession’s lasting effects and steep regional competition.

But in offering an off-price alternative on brand-name merchandise, Kohl’s has found success, posting a 26 percent gain for comparable stores in November. Sales figures have not been released for December, though company officials expect that November and December sales would rise in the midsingle digit range.

For the third quarter ended Nov. 3 Kohl’s reported net income of $100.2 million, compared with $76.7 million a year earlier. Same-store sales during the period increased 7.1 percent.

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