ANALYSTS NOT COUNTING ANTONINI OUT

Byline: M.T.

NEW YORK--Joseph E. Antonini, the embattled president and chief executive officer of Kmart Corp., is down, but not out yet.
As reported, his title of chairman was stripped away on Jan. 17 and given to Donald S. Perkins, a member of Kmart's board and former chairman and ceo of Jewel Cos. Inc., a supermarket chain.
At that time, it appeared Antonini's days at Kmart were numbered due to the sagging fortunes of the chain. Analysts expect the Troy, Mich.-based Kmart to report disappointing fourth-quarter earnings, and its eighth consecutive quarterly earnings decline.
Nevertheless, some analysts believe Antonini has been granted a stay, perhaps a year or two, to engineer a Kmart turnaround.
Wayne Hood, an analyst at Prudential Securities, said in a report dated Jan. 19, that he viewed Perkins's appointment as "a signal" that the board is watching more closely the strategic changes that are taking place at Kmart.
"I don't believe it signals that Antonini is on his way out," Hood said in the report. "In fact, we think the appointment of Perkins as chairman may have even come at the request of Antonini."
Hood said he believes Kmart's plan to conduct a another strategic review--which was disclosed in conjunction with Perkins's appointment--sets up a framework for Antonini to remain as president and ceo. The review will encompass merchandising, leadership, financial policies and operational execution.
"Kmart's new strategic plan will allow Antonini at least another year, or even two years, in which to turn around the business," Hood said. "If the changes in strategic direction, which the board has so far endorsed, prove ineffective, then a new strategic plan as well as a new president and ceo would be called for. I don't believe this will happen before 1996."
Janet Mangano, an analyst at Burnham Securities, agreed that Antonini "needs more time" to pull off the turnaround.
"I think he's the man to do the job, to execute the strategies, to supervise them and spearhead them as well. And I don't know anyone who could step into his shoes."
Mangano attributed some of Kmart's lackluster results to weakness in the discount industry, which dampened the positive impact of remodeling and remerchandising efforts long under way.
She added, "When you're dealing with a retailer as huge as Kmart is, you can't expect it to turn around in several quarters or even four to six quarters. It takes a long time."
In explaining Perkins's appointment as chairman, Kmart said the change would give Antonini more time to focus on operations rather than chairing board meetings.
"Joe Antonini understands retailing and merchandising as well as any executive anywhere," F. James McDonald, a Kmart director, said at the time the management change was disclosed. "The board is confident he is the right retail executive to continue to improve Kmart."

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