Kohl's 2011 Annual Report Download - page 10

The costs and other effects of other new legal requirements cannot be determined with certainty. For
example, new legislation or regulations may result in increased costs directly for our compliance or indirectly to
the extent such requirements increase prices of goods and services because of increased compliance costs or
reduced availability of raw materials.
We continually monitor the state and federal employment environment for developments that may impact
us. Failure to detect changes and comply with such laws and regulations may result in an erosion of our
reputation, disruption of business and/or loss of employee morale. Additionally, we are regularly involved in
various litigation matters that arise in the ordinary course of our business. Litigation or regulatory developments
could adversely affect our business operations and financial performance.
Damage to the reputation of the Kohl’s brand or our private and exclusive brands could adversely affect our
sales.
We believe the Kohl’s brand name and many of our private and exclusive brand names are powerful sales
and marketing tools and we devote significant resources to promoting and protecting them. We develop and
promote private and exclusive brands that have generated national recognition. In some cases, the brands or the
marketing of such brands are tied to or affiliated with well-known individuals. Damage to the reputations
(whether or not justified) of our brand names or any affiliated individuals, could arise from product failures,
litigation or various forms of adverse publicity, especially in social media outlets, and may generate negative
customer sentiment, potentially resulting in a reduction in sales, earnings, and shareholder value.
Disruptions in our information systems could adversely affect our sales and profitability.
The efficient operation of our business is dependent on our information systems. In particular, we rely on
our information systems to effectively manage sales, distribution, merchandise planning and allocation functions.
We also generate sales though the operations of our Kohls.com website. The failure of our information systems
to perform as designed could disrupt our business and harm sales and profitability.
Unauthorized disclosure of sensitive or confidential customer information could severely damage our
reputation, expose us to risks of litigation and liability, disrupt our operations and harm our business.
As part of our normal course of business, we collect, process and retain sensitive and confidential customer,
employee and company information. The protection of this data is extremely important to us, our employees and
our customers. Despite the considerable security measures we have in place, our facilities and systems, and those
of our third party service providers, may be vulnerable to security breaches, acts of vandalism, computer viruses,
misplaced or lost data, programming and/or human errors, or other similar events. Any security breach involving
the misappropriation, loss or other unauthorized disclosure of confidential information, whether by us or our
vendors, could disrupt our operations, damage our reputation and customers’ willingness to shop in our stores or
on our website, violate applicable laws, regulations, orders and agreements, and subject us to additional costs and
liabilities which could be material.
Item 1B. Unresolved Staff Comments
Not applicable
Item 2. Properties
Stores
As of January 28, 2012, we operated 1,127 stores in 49 states. Our typical, or “prototype,” store has
approximately 88,000 gross square feet of retail space and serves trade areas of 150,000 to 200,000 people. Most
“small” stores are 55,000 to 68,000 square feet and serve trade areas of 100,000 to 150,000 people. Our “urban”
stores, currently located in the New York and Chicago markets, serve very densely populated areas of up to
500,000 people and average approximately 125,000 gross square feet of retail space.
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