NEW YORK — Kmart hopes it finally has the right stuff — especially when it comes to beauty.

The beleaguered chain, currently using a tag line — Stuff of Life — has a new look being tested at a store in White Lake, Mich. The design, featuring a bright green decor package that replaces the older red, white and blue, is also being implemented in four stores in Peoria, Ill. There are, however, a few tweaks in each of the test layouts.

If the look plays in Peoria and this 70,000-square-foot store in Michigan, it could be rolled out to the existing 1,831 Kmarts across the country. The goal is to sell more stuff from each store as Kmart struggles to regain financial health.

Kmart officials call the signage color "outrageous" green and it is a major departure from the traditional red Kmart signs. The store design was created by the Arnell Group (famed for work with DKNY), with the Dayton, Ohio-based Design Forum completing research, sharpening category adjacencies and conceiving the floor plan.

In addition to tapping consumer opinions — and following shoppers around with video cameras — to learn what Kmart needs to do, Kmart queried its employees who proved instrumental in providing ideas. One twist culled from employees: shopping carts for kids that look like cars.

One of the major alterations here is the widening of the shopping aisles. Traditional Kmarts only had 4 feet between fixtures — some departments here span 8 feet. Also, the store is sparkling clean and well lit. That plays out in beauty care where some fixtures are illuminated — a major upgrade for Kmart. The changes were made to this store, which remained open during the construction, last August. There are also enhanced navigational tools throughout the store and improved shopping adjacencies. For instance, health and beauty care was not next to the pharmacy in this store — now it is.

Kmart has long tinkered with how to present cosmetics and beauty care. Ten years ago, the chain linked cosmetics with jewelry and accessories. In the early 1990s, Kmart moved beauty to the front of the store and merged it with health and beauty care as well as pharmacy, in stores with Rx counters. The thought was to create a mini drugstore under one roof. Consequently, Kmart has a patchwork of store designs across the country with cosmetics in many spots.In this store, Kmart is linking beauty and health and beauty care, but giving each a distinct home. Since Kmart is zeroing in on expanding departments frequently shopped by busy women, categories such as shampoo and toothpaste take on great importance. These aisles, in particular, are airy and bright. There is a pharmacy nearby with a separate waiting area complete with chairs.

In cosmetics, Kmart is making efforts to tailor the beauty assortment to each store. For example, locations with a high concentration of women of color have expanded ethnic lines. In a shift for Kmart, local managers are given more leverage to bring in lines desired at each store. Kmart has also committed to specialty advertising vehicles such as Spanish ads in Hispanic markets. The chain, like many mass merchants, is also experimenting with its own brand, Love Always, Magenta.

The rest of the store brims with some of the key brands Kmart has secured recently to burnish its image, such as Joe Boxer. And, of course, Martha Stewart continues to be a core line in Kmart. Perhaps the chain can relate to the decorating maven’s woes — it is currently investigating alleged financial improprieties from the previous management.

The new colors and decor package are just part of Kmart chairman and chief executive officer Jim Adamson’s overhaul. He hopes to lure back shoppers who have gone to Wal-Mart or Target and to restart sales which have slumped since filing for Chapter 11 last January. At that time, many consumers complained the stores were dark and dirty. Kmart has also started closing stores, with 283 shut downs this year. Kmart posted a loss of $377 million in its second quarter with sales down 15.7 percent to $7.52 billion.

Adamson, who has drugstore retailing experience from his days at Revco, hopes to bring Kmart out of bankruptcy by the spring of 2003.

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