NEW YORK--Kmart Corp. said Wednesday its search for a chief executive officer "is not yet completed " and "any speculation is premature." The discounter issued the brief statement in response to an article in Wednesday's edition of The Wall Street Journal, which said Richard G. Cline, chairman of Nicor, a natural gas distribution utility in Naperville, Ill., was offered the job and would give his response Wednesday. A report about Cline being a Kmart ceo candidate appeared in WWD on May 10. He declined comment at that time. On Wednesday, his assistant said he was out of town and could not be reached. A Kmart spokeswoman said no further statements from the company would be issued on Wednesday but added, "The search has narrowed. It is continuing, but we don't have a specific timeline as to when we will make an announcement." Asked if a new ceo could be announced in time for Kmart's annual meeting May 23, she said, "It's not our intent to do that. At this point there is no announcement scheduled. We're not working on anything internally." She characterized the story in The Wall Street Journal as "purely speculative." As reported, Cline has been nominated to the Kmart board. Like some other reported Kmart candidates, Cline is a former executive of Jewel Cos., a Chicago-area supermarket chain. His assignments during his 22 years there included senior executive vice president, president and chief executive officer. He was also president of Osco Drug, a drugstore subsidiary of Jewel. Donald Perkins, who succeeded Joseph Antonini as Kmart chairman in January, was chairman and ceo of Jewel for 10 years before retiring in 1980. Market sources described Cline as a good leader who successfully divested businesses at Nicor, reduced debt and put the company on a more profitable growth track. However, they note, he is 60 years old and if appointed ceo would probably not hold the post long-term. One source said he would serve as a "caretaker" for the troubled discounter, providing "some management stability" rather than new strategies and vision. He has no experience in discount retailing. Another retail source said Kmart would do better by recruiting a Target or Wal-Mart executive with a track record and a better chance of inspiring Kmart merchants. Two other Jewel alumni, Ronald J. Floto, Kmart executive vice president and president of Super Kmart Centers, and Robert C. Nakasone, president and chief operating officer of Toys "R" Us are also among those rumored to be candidates. "If Richard Cline were to be appointed ceo, I don't think it would satisfy institutional investors in the short term," said Barry Bryant, a senior retail analyst at Ladenburg, Thallmann & Co. "Historically, successful retail companies have been run by merchant princes. "On the other hand, Richard Cline has a very good record with shareholders at Nicor," Bryant said. "He has been given credit for turning Nicor's ship building businesses around. Maybe what the company needs is a technician." "I suspect there would be some disappointment if Kmart appointed somebody that didn't have a [discount] retail background," said Karen Saks a retail analyst at Standard & Poor's. "There is concern that the market share Kmart has lost to other discount retailers is not retrievable. Retailing is not rocket science, but if you come from a retail background you understand the logistics and systems, and you can hit the ground running."
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