NEW YORK -- Kmart might be readying the closure of hundreds of stores, but as chairman James B. Adamson sees it, there is no major drop in sales volume ahead.
The ailing retailer will announce a wave of store closures on March 11. As a result, Adamson said: "We'll downsize to $35 billion, give or take a few billion. That's [still] a lot of money" in terms of sales, he said. But considering the number of stores to be shuttered, that isn't much of a drop from last year's $37 billion volume, he suggested.
In a press conference following the official launch of Kmart's exclusive Disney brand children's merchandise, at Kmart in Astor Place, Adamson outlined his battle plan for getting through the bankruptcy and strategies for the future. Adamson is effectively leading Kmart through its turnaround, although Chuck Conaway remains its chief executive officer.
The top priority: keeping the company together by limiting employee departures and revenue declines. "Programs to keep our employees from going somewhere else, that's our primary investment," he said.
Other initiatives he cited:
Creating more sharply defined apparel departments, already being seen to some extent this spring, in areas such as Jaclyn Smith and Route 66.
Eliminating weak categories and bolstering strong ones. "The biggest challenge is communicating growth categories and eliminating weaker categories," he said.
Continued efforts to add exclusive lines. "We are looking at other licenses as we speak, but I will not tell you about them until they are signed," he said.
Catering to minority populations better by, for example, expanding its Martha Stewart marketing effort.
Adamson explained that store closings are not based on geography or demographics. "It's purely financial," and based on earnings before interest, taxes, depreciation and amortization, he said. And even if a store is not meeting its profit goals, it could be retained if the company feels it could improve, Adamson added. Stores are expected to begin closing this summer.
He also discounted some analysts' estimates on store closings, which have been as high as 500 to 700, as being too high. Kmart operates 2,100 stores and went Chapter 11 on Jan. 22.
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