By  on November 8, 2005

NEW YORK — The top apparel and home design executive at Kmart, Lisa Schultz, has been named to oversee all apparel design teams as executive vice president of Sears Holdings Apparel Design, a new position.

The Schultz appointment reflects an effort to bolster the look and quality of apparel offerings and improve margins, although it is believed that Edward S. Lampert, chairman of Sears Holding Corp., has been primarily focused on selling assets. Sears Holdings is the parent of the Sears and Kmart chains.

Schultz intends to build the design team to further the development of private label merchandise. Key fashion labels at Sears include Lands' End, Apostrophe and Covington. Kmart's key private brands are Jaclyn Smith, Route 66, Attention and Thalia.

Competitors such as Federated Department Stores, Target and J.C. Penney have more successful private label apparel programs.

However, Sears Holding is stronger in hard goods, selling private brands such as Kenmore, Craftsman and DieHard at Sears stores and Martha Stewart Everyday at Kmart. The company is considered a leader in selling tools, lawn and garden products, home electronics and automotive repair supplies.

Schultz, who was senior vice president of design for Kmart, had been reengineering Kmart's proprietary fashion and home businesses, applying what she learned during 14 years at Gap Inc. to the mass channel.

Kmart merchants began functioning more like general managers, rather than selecting goods, and the intent was to exert tighter control over the designs, pricing and quality controls. Kmart has shown some improvement emphasizing key items and outfits, improving the flow of goods to the shelves and eliminating a lot of labels that meant nothing to consumers. Last year, Kmart's women's, men's, kids', accessories and jewelry were estimated at $5 billion in sales.

"In two years, Lisa has assembled a team of talented and enthusiastic designers and has refashioned and defined the Kmart apparel line," Lampert said in a statement. "She has also been a valuable contributor to the development of our strategy. Lisa's demonstrated ability to attract, retain and develop creative talent will be critical as she expands our combined design organization and works with our valuable design associates in New York City [where Kmart has a design studio] and Hoffman Estates [Ill.]," where Sears has a design studio.Schultz will report directly to Lampert and have responsibility for all of Sears' and Kmart's apparel design teams, raising the possibility that there will be more sharing of merchandise between the two chains in the future, and similarities in the development of fashion offerings. Sears Holding declined to comment on that possibility, or discuss how much of the company's overall sales volume is represented by private label.

Sears Holdings had $55 billion in annual revenues last year, and operates 3,900 full-line and specialty stores in the U.S. and Canada.

Before joining Kmart in 2003, Schultz was executive vice president of product development and design at Gap for 14 years. In an interview with WWD last year, Schultz said, "I'm not afraid to bring great design to the people. I am very practical. I feel like I understand what the customer wants."

Sears continues to search for a chief merchant to replace Louis Padilla, who left about a month ago. In addition, the Kmart division is searching for a chief marketing officer to replace Paul Guyardo, who departed last month to work for Direct TV.

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