In the best of times, thinking outside the box is a virtue. In the worst of times, retailers would do well just to study Sam Walton, the patron saint of giving the customer what she wants, where she wants it, when she needs it. Wal-Mart (NYSE:WMT) became the growth story of the last century -- and the retail stalwart of the new millennium -- by religiously executing business concepts a second-grader could understand. Kohl's (NYSE:KSS) is looking like it paid attention in Retail 101, too.

Times are tough ...
Comps were down at Kohl's almost 7% for 2009, while year-over-year earnings per share were off nearly 15%. Such is life in retail these days, but the folks in Wisconsin aren't panicking. The balance sheet is solid, with some hefty debt but nearly none of it current. Free cash flow came in at $687 million, a full $1 billion better than last year, thanks to drastic cuts in capital expenditures.

... but Britney will save us!
Penetration by the established Kohl's brand and launching exclusive partnerships are top priorities. Kohl's and consumer-brand owner Iconix Brand Group (NASDAQ:ICON) have started a relationship with Britney Spears to market Kohl's exclusive junior brand, Candie's, which will feature the pop icon and paparazzi gold mine in print, television, and digital ads, as well as sponsoring her tour that started this week.

By herself, Britney probably won't turn around Kohl's sales slump, but the company's financial commitment speaks to the importance it places on its exclusive lines. Shoring up the brand in the midst of an economic storm is nothing exotic. That's also the modus operandi at other brand-dependent companies, including Gap (NYSE:GPS) and Volcom (NASDAQ:VLCM).

Location, location, location
Kohl's plans to open 55 new stores this year. A majority of these (36) were purchased at the liquidation of Mervyns. This real estate is mostly in heavily populated areas like California, which has little room for new development. On the other hand, Kohl's is also opening its first location in Alaska. Some investors might bemoan this seemingly aggressive expansion, with the stock selling at a price-to-earnings ratio of just 12 and cash in the bank for share repurchases.

As for me, though, I think Kohl's is making the right move. I'd much rather see a company with strong branding seize the opportunity to claim market share by spending some money in the midst of a consolidating retail industry. Those Mervyns customers need to shop somewhere -- why not in exactly the same location with a Kohl's sign on the front?

I look for Kohl's to emerge from this economic calamity a stronger company.

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Fool contributor Kirby Adams owns shares of Volcom. Wal-Mart is an Inside Value recommendation. Volcom is a Motley Fool Hidden Gems pick. The Motley Fool is investors writing for investors.