Kmart has a way to lower some of its inventory acquisition costs.
The discounter’s strategic merchandising group is actively sourcing “extreme-value” deals, otherwise known as inventory of liquidated firms, as well as “other opportunistic situations” that it might come across.
While Kmart said the purchases would provide higher recoveries to sellers in need of inventory monetization, what the discounter didn’t say was that the move also lowers its acquisition cost for some of the inventory at its stores. It’s a move that helps to keep some costs down.
Kmart’s parent Sears Holdings Corp. said earlier this month that it would accelerate efforts to close 50 stores, as well as look at additional asset sales and store closures in the search for liquidity. Ratings agency Fitch said Sears’ liquidity is worsening and that it would need $2.5 billion to fund operations this year. Total comparable-store sales dropped 7.1 percent in the fourth quarter and were down 92.2 percent for the full year.
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Kmart president Alasdair James spun the new inventory acquisition idea as a boon to customers, stating: “The path to making Kmart great again starts with sourcing truly brag-worthy deals.” Noting how the discounter last year brought back the “Bluelight Specials,” James said that Kmart continues to “find innovative ways to provide our Shop Your Way members with an extreme value proposition that can only be found at Kmart.”
He offered an example of a forthcoming deal: outdoor cookers, smokers, outdoor lighting and hand-held lighting manufactured by The Brinkmann Corp. Kmart said the items will soon be sold as Bluelight Specials, adding that the closeout prices are “brag-worthy deals.”
But its key problem remains the same regardless of how much — or how little — Kmart spends to acquire its inventory: Will what Kmart buyers acquire be the items that shoppers want?
Kmart added that it “offers Bluelight Specials every single day at every single store, online at kmart.com and via the Kmart app.” Further, dedicated Kmart members who download the discounter’s app can receive real-time push notifications on Bluelight Specials that are exclusively on kmart.com.
The Bluelight Special was introduced at Kmart in the mid-1960s as a way of clearing out slow-moving merchandise.