THE TOP TEN KMART PULLS THEM IN WITH ITS NEW LOOK FOR THE NINETIES.
Byline: DIANNE M. POGODA
NEW YORK--Despite its ongoing financial troubles, Kmart Corp. still attracts a loyal cadre of shoppers, many of whom remember when Kmart was S.S. Kresge. The Troy, Mich.-based retailer operates 2,350 stores in the U.S. with a volume of $34.1 billion, with 40 percent of that, or $13.6 billion, in softgoods. Apparel prices appear to be a key factor for consumers. "I usually can find what I am looking for, and the price is right," said one consumer. "The prices are cheaper than some of the other stores." Another responded, "They have decent prices. They are a lot cheaper and have good quality. The clothes are true to size. For example, a size 10 is a size 10." She said the made-in-America factor is important, too. In the survey, Kmart did well in Southern markets, ranking among the top five choices in Atlanta and Miami. While it attracts shoppers of all ages, it's particularly strong among young consumers, age 18-29, and older shoppers, age 50-64. Its core customer is from a traditional family with a household income between $25,000 and $50,000. As for apparel, 73 percent of respondents said they shop Kmart for its selection and variety; 58 percent cited prices; 35 percent chose it for location; 23 percent named value, and 23 percent cited size and fit. Women ranked Kmart third for prices, fourth for hours of operation and fifth for sales promotions and location. The survey revealed that Kmart did not capture top honors as the best place to buy any single apparel item. However, it placed third for socks/hosiery and pantyhose, fifth for sportswear other than jeans, and fifth for activewear. Kmart has been putting its best foot forward to consumers with its store renewal plan, which started in 1990. By the end of 1995, it expects to have its full fleet in top shape. "Customers strongly prefer the ambience of the 'new look' Kmart stores," said Kmart's chairman and chief executive officer, Joseph Antonini. He said they cite wider aisles, better lighting and "more appealing" merchandise displays. Antonini said the toll-free customer service line has helped the company get feedback. Kmart reports that renewed stores generate a 17 percent increase in sales, a 6 percent boost in dollars spent per transaction, 16 percent more units sold and 12 percent more customer traffic. Part of Kmart's financial problems were related to antiquated stores, outdated information systems, and overstocked inventory that forced markdowns. An undefined fashion image also shared some of the blame for sagging sales, according to analysts. Nevertheless, analysts say the company is poised for a rebound in the bottom line and a pickup in apparel. Kmart is also stepping up its expansion in the supercenter arena, the next wave among mass merchants, adding 50 Super Kmart Centers by the end of the year. Supercenters combine a traditional general merchandise store with a full-line grocery store. As reported, Kmart said it will close 110 underperforming stores in January and February, and eliminate 6,000 store positions and 10 percent of its management force over the next 18 months. In addition to the 50 supercenters, it will have opened 64 updated discount stores by the end of the year. Kmart also hired Anderson Consulting to orchestrate an internal program for associates, called "Think Like a Customer." The aim is to improve service in the stores. The company has been upgrading its management information and inventory control systems in order to pare its overhead and keep retail prices down. It is also trying to distinguish itself with exclusive labels, particularly its flagship Jaclyn Smith brand, which spans ready-to-wear, casual and career sportswear, accessories, hosiery and fragrance. Kmart estimates 30 million American women have some Jaclyn Smith item in their wardrobes. Other private brands include Kathy Ireland swimwear; Rachel McLish workout wear and Martha Stewart home goods. It also has several collections of private brand merchandise that are not affiliated with any celebrity.
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