NEW YORK -- The heat might be turned up on Kmart's Joseph Antonini, but he says he's staying put.
"Joe Antonini is alive and well and has the support of the board," he said in a telephone interview from his Troy., Mich., headquarters Wednesday.
The chairman and chief executive officer of the nation's second largest retailer has been under pressure to revive the sagging discount store operation over the last year. At the annual meeting last Friday, a management-backed proposal to sell stakes in the company's specialty chains -- Sports Authority, Waldenbooks/Borders, Office Max and Builders Square -- was defeated, catching management by surprise.
Analysts read that as a strike against Antonini's leadership, showing shareholder discontent with the way the discount business is being handled. Some observers also questioned the ability of Kmart to continue its $3.5 billion renewal program of the discount stores.
On Wednesday, Antonini explained that the purpose of the proposal was to create a value for the specialty companies, since they are not traded separately from Kmart Corp., and to provide incentive for their management teams to build the divisions aggressively.
"The board and management felt that this was in the best interest of the shareholders, for a variety of reasons," he said, citing tax benefits, accounting changes and creditworthiness, among other things.
"We had been studying several initiatives over the past year or so, and we will continue to study options," he said, but declined to elaborate on any possible strategies.
Antonini emphasized that Kmart has enough money for capital expenditures from continuing operations to keep the pace of its modernization program, which started in 1990, and aims to have about 1,600 of its 2,400 stores complete by the end of this year.
In the six years he has been chairman and ceo, Antonini pointed out, the specialty units have grown to a value of about $3 billion, from deficit operations of about $300 million. Kmart's 1993 volume was $34.1 billion, second only to Wal-Mart Stores' $67.3 billion.
Another possibility raised by analysts was that Kmart would have to bring in a chief operating officer to help get back on track."There are no sacred cows in this company, but that's not under consideration at this point," Antonini said. Asked about recurring reports that Kenneth Macke, former ceo of Dayton Hudson Corp., might be joining Kmart, Antonini said he had not heard the rumor and said it wasn't true.
Antonini said the women's apparel business has "responded nicely" over the last couple of weeks, as the weather has warmed in the Midwest and the East. He said inventory would grow slightly this year, but would remain under last year's levels because "we had too much." He said that an overall leaner inventory was in the best interests of the company.
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