OPERATIONS

Kohl’s expands New York design studio, adds California studio

BY Katherine Boccaccio

Menomonee Falls, Wis. — Kohl’s Corp. said Thursday it is doubling the size of its design office in New York City, as well as adding its first design studio on the West Coast, in Santa Monica, Calif.

The move, said the company, represents a commitment to its exclusive brands.

"The investment reinforces our commitment to offering world-class brands at compelling value to our customers," said Kevin Mansell, Kohl’s chairman, president and CEO, in a statement.

Exclusive brands now account for 51% of Kohl’s total revenue.

The Santa Monica studio will open on Monday, staffed by 20 trend and graphic arts professionals. The company’s design studio in New York, located near the Garment District, will double in size to 100,000 sq. ft. by 2014. It currently houses 140 designers, but could nearly double to about 250, said the company.

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OPERATIONS

Delhaize to close 113 Food Lion stores, retire Bloom banner

BY Katherine Boccaccio

Brussels — Belgian supermarket operator Delhaize Group, which operates the Food Lion, Bottom Dollar Food, Harveys, Hannaford Supermarkets, Reid’s and Sweetbay regional banners in the United States, said Thursday it will close 113 Food Lion stores and eliminate the Bloom banner as part of a reorganization. The Fool Lion stores slated for closure are primarily in markets in which the company has the least store density.

In addition, the chain will convert 42 of its Bloom locations to Food Lion and close the remaining seven Bloom stores. It will also convert 22 of its Bottom Dollar Food stores in North Carolina, Virginia and Maryland to Food Lion, and close the six remaining Bottom Dollar Food stores in those markets.

“We have decided to focus our Bottom Dollar Food brand on markets which provide the greatest opportunity for growth such as Philadelphia, where we have enjoyed considerable success, and Pittsburgh, where we will open our first stores in the first quarter of 2012,” the company said in a statement.

The store closures, slated to occur within 30 days, will result in approximately 5,000 job losses.

The company will also close a distribution center in the United States and 20 stores in Southeastern Europe.

Sub-par fourth-quarter sales in the United States and Belgium markets prompted the move. Revenue rose 7% to $7.16 billion in the quarter, which included a key acquisition. Same-store sales in the United States dipped 0.4% and fell 1.5% in Belgium. The United States is Delhaize’s most important market with 1,650 stores, double the number of its Belgian home market.

“Today’s actions will continue to solidify our U.S. operations and enable our company to focus on our successful brand strategy repositioning at Food Lion and the expansion of Bottom Dollar Food in new markets,” said Ron Hodge, CEO, Delhaize America. “While these were difficult decisions given the impact on our associates, customers and communities, we believe these actions will enable us to better serve our customers in our markets with high density, while positioning the company for future growth.”

"While we grew our revenues for the full year, we are disappointed in the fourth quarter revenues in the U.S. and Belgium," Pierre-Olivier Beckers, Delhaize CEO, said in a statement.

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OPERATIONS

Walgreens executives outline growth strategies at annual meeting

BY Marianne Wilson

Deerfield, Ill. — Walgreens’ chairman Alan G. McNally, president and CEO Gregory D. Wasson and executive VP and CFO Wade D. Miquelon on Wednesday outlined the company’s strategies for growth and value creation for shareholders at the chain’s annual shareholders meeting.

“As our broad-based transformation continued to accelerate and gain momentum, fiscal 2011 was a year of strong performance for Walgreens with record sales and earnings, double-digit growth in earnings per share in all four quarters and a dividend increase of more than 28% – the largest in the company’s history,’ McNallly said.

Walgreens for fiscal 2011 recorded $72.2 billion in sales, $20.5 billion in gross profit and $2.94 in earnings per diluted share. In addition, cash flow from operations was $3.6 billion.

CEO Wasson told shareholders that Walgreens is stepping out of the traditional drug store format and creating “something unique, new and special.

“Our opportunity now is to combine the best locations in America with an outstanding customer and patient experience – what we call the ‘Well Experience,” he said. “Our new pilot drugstore format supports our vision of becoming My Walgreens for everyone in America, the first choice for health and daily living.”

Walgreens latest example of its “Well Experience” stores is its new flagship in Chicago’s Loop. The store features an enhanced, state-of-the-art pharmacy designed to encourage greater interaction between pharmacists and patients; a Take Care Clinic offering a wide range of health care services including vaccinations, health tests, physicals and treatments for common illnesses and minor injuries; an Upmarket Café featuring a juice bar and fresh hand-rolled sushi; and a Look Boutique beauty department featuring dozens of prestige and niche cosmetic, skincare and hair care brands not typically found in drugstores.

The pilot program for Walgreens “Well Experience” store format includes more than 20 locations in the Chicago area. On Jan. 19, the company takes the next step with its “Well Experience” format when it celebrates the grand re-opening of all of its Indianapolis market stores, which recently finished their conversion to the new pilot format.

“With these innovative changes, we can more easily and quickly expand the scope of services we can offer in our drugstores, such as immunizations and vaccinations, and acute and primary care,” Wasson said. “This is what we mean when we say we are advancing the role community pharmacy plays in health care in America.”

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