Is Kohl’s the "New" Target?

I was on Twitter yesterday and came across the following tweet from @TalkRetail:

Impressed by Kohl’s. Despite low-cost model, gleaming store & lots of style. Can anyone here speak 2 their product quality?

One of the respondents to the question said:

My wife buys clothes for all 4 of our kids there. Stores all over here in Dallas. Nice mix of price/quality. $KSS

Instantly I got to thinking, “where have I heard that before?”. Oh, yeah, it was how people described Target (TGT) a few years ago. So I began asking around. The typical comment was that “Kohl’s is like a Target without the food/grocery but better bargains on clothes”. Hmmmm

So, then I started looking closer. In order to do this, we have to look apples to apples. This was a little tough because we are going to look at monthly same-store-sales data and that means we are at the whim of what the company decides to report. For Kohl’s (KSS) it is easier because we are using the the whole business, it is tough for Target because we need to find the similar segment date in order to make the comps mean anything. Including Target’s electronics of grocery segments in the comps make the exercise meaningless.

I am using Target apparel and home sections as those two segments essentially cover all of Kohl’s. I am also going back 5 months because based on what I am hearing, this is not a long term trend but a more recent one.

What did we find?

December:

Target: “Both the apparel and home assortments experienced high single-digit comparable-store sales declines in December” Release

Kohl’s: “On a comparable store basis, sales decreased 1.4 percent.” Release

January:
Target: “Comparable-store sales in apparel declined in the low teens overall” & “Comparable store sales in our home assortment declined at a high single-digit rate” Release

Kohl’s: “On a comparable store basis, sales decreased 13.4 percent.” Release

February:
Target: “Comparable-store sales in apparel declined in the low double-digit range,” & “Comparable store sales in our home assortment declined in the high single-digit range,” Release

Kohl’s: ” On a comparable store basis, sales decreased 1.6 percent.” Release

March-
Target: “Comparable-store sales in apparel declined in the low double-digit range,” & “Comparable-store sales in our home assortment declined in the low double-digit range” Release

Kohl’s: “On a comparable store basis, sales decreased 4.3 percent.” Release

April:
Target: “Comparable-store sales in home and apparel declined in the high single-digit range” Release

Kohl’s: “On a comparable store basis, sales decreased 6.2 percent.” Release

Not in a single month has Target apparel/home sections bested Kohl’s peformance. It appears they may have achieved a draw for two months, but that does not make up for the abysmal discrepencies the other months. Now, they are both experiencing declines like the rest of the retail world but Kohl’s is decidedly hanging on to more of its clothing shoppers.

Fashion, in particular womens was what fueled the Target growth. If you look at some of the releases you’ll see womens apparel down 20% in some months, stunning.

Am I saying that Kohl’s is going to overtake Target someday soon? No. What I am saying is that I am hearing the same reasons for shopping at Kohl’s today that I heard for shopping at Target a few years ago. What’s worse? I no longer hear those things associated with Target anymore.

This is a double whammy for Target. It is already clear they have lost the “consumer value” proposition to Wal-Mart (WMT) based on all evidence and are falling farther behind the industry leader. Now they may be feeling heat from behind on the “fashion” end from the likes of Kohl’s.

This is worth watching down the road to see if as the economy recovers, the two companies apparel result continue this disparity..

Disclosure (“none” means no position):none