KMART: 600 MAKEOVERS IN ’97
Byline: Nancy Brumback
CHICAGO — Kmart Corp. has rolled out a new logo — Big Kmart — for its discount store of the future and will affix the name on 600 to 625 units this year as they are converted to the retailer’s high-frequency prototype.
Kmart’s top executives, including Floyd Hall, chairman, president and chief executive officer, and Warren Flick, president and chief operating officer of U.S. stores, introduced the logo last Wednesday during a tour of the first Big Kmart, on Diversey Avenue here.
The logo design uses the company’s signature red K with the word “mart” inside the letter, along with the word “big” in bold, blue capital letters. The logo also features an orange, comet-like symbol below the type, similar to the one the Troy, Mich.-based company uses on its Super Kmart stores.
The 186 Kmart stores converted to the high-frequency prototype in the past two years, plus 111 units remodeled so far this year, will be reflagged in the next 90 days, Hall said.
Stores in the format — which place an expanded women’s apparel department near the entrance and feature larger assortments of consumables than traditional units — are registering same-stores sales gains of 15 to 18 percent for the year to date, compared with growth of 4 to 5 percent in the older units, Hall noted.
Kmart has budgeted about $750 million for planned conversions to the Big K high-frequency format in the next three years. All but about 180 Kmart discount stores, which have selling areas of less than 60,000 square feet, will become Big Ks.
The company operates 2,036 discount stores and 97 Super Kmarts. Most of Kmart’s capital spending this year will go into the remodels.
With the launch of the logo and acceleration of Kmart’s Big K conversions, the chain is focusing more sharply on young mothers, its target shoppers. Kmart has rearranged about 90 percent of its traditional layout to put products most frequently purchased by these customers front and center: women’s apparel, basic grocery items, cosmetics and sheets and towels.
During a walk-through of the Big K in Chicago, the Kmart executives highlighted some changes in the new format.
Women’s apparel occupies about one-third of the store’s central section, near the checkout registers, rather than sharing that space with men’s apparel as it has in traditional Kmart stores. Men’s wear has been moved to the back wall of the Big K prototype, closer to the sporting goods, hardware and automotive departments.
Casual sportswear is at the front of the women’s department, while Kmart’s Basic Editions label is housed along the area’s back wall. The Kathy Ireland and Jaclyn Smith private label collections get shop treatments in the center of the department.
Steven M. Ross, senior vice president and general merchandise manager, cited the emphasis placed in basic apparel categories on national brands — including Hanes, Fruit of the Loom, Playtex and Wrangler.
“We want to be the headquarters for jeans and jeans-related product,” Ross said, pointing out a denim area where brands such as Chic, Riders, Gitano and Brittania were displayed prominently along with Route 66, Kmart’s private label line.
Intimate apparel also gets the big-brand treatment, with labels like Playtex, Vassarette and Hanes featured in a corner section of the women’s department on a main aisle.
“We want to make a strong presentation in intimate apparel, emphasizing brand, size, color and style,” Flick said.
In addition, the maternity area is being pumped up, said Ross, with a goal of moving from four rack displays to between six and eight racks, plus wall displays by yearend. Denim and knit goods are prominently placed.
In making a stronger bid for young mothers, Kmart has relocated the girls’ apparel area opposite the women’s area from the spot it occupies opposite the men’s department in traditional units. Displays have been redesigned to make more girls’ items visible, said Ross, who noted, “It is very important to reach out visually with girls’ apparel.”
Also getting fresh display treatment in the prototype is the cosmetics area, with brand names like Noxell’s Cover Girl displayed on the section’s rear wall above new, top-lighted display fixtures.
The department is next to the jewelry and fashion accessories areas, just across an aisle from women’s.
In addition to moving some departments, the Big K prototype has wider aisles, clearer signs and brighter lighting than traditional units. The expanded grocery area has about 1,500 more stockkeeping units than conventional Kmarts. Some items, like milk and other dairy products, are “priced below the most competitive grocery store in a given market,” Hall said.
In major markets, stores will be converted to the Big K format according to newspaper retail advertising zones, so that customers will receive either Big K or Kmart advertising, Hall explained. Ads and direct mail pieces explaining the new format emphasize the expanded consumables assortment to encourage greater shopping frequency, and also push Kmart’s new Martha Stewart home furnishings collection.
Kmart will wait until 1998 to begin opening stores again. Roughly 35 discount stores and 15 to 18 Super Kmarts are planned, Hall said.