Byline: Mark Tosh

NEW YORK — Moving to fill the roles of chief merchant and head of its discount division, Kmart Corp. on Thursday named retailing veteran Warren Flick to be general merchandise manager and president of U.S. Kmart stores.
Flick, currently chairman and chief executive officer of Sears de Mexico, also will become an executive vice president of the corporation when he joins the struggling discounter on Jan. 2. He will report to Floyd Hall, chairman, president and ceo of the company.
The 51-year-old Flick will assume the merchandising responsibilities previously held by Charles Chinni, who left Kmart in October after clashing with Hall over merchandising strategy. Chinni, a former Macy’s merchant, reportedly was adding too much merchandise with department store-like price tags.
Flick has 30 years of retail experience. He first joined Sears in 1966 and was there until 1980, when he went to Harper Industries and then to Montgomery Ward. He left Ward in 1987 and rejoined Sears the following year.
During his second stint at Sears, he was group vice president for men’s wear, children’s wear, home fashions and footwear and helped develop the chain’s updated soft-goods strategy.
His role at Kmart will be broader than Chinni’s in that he will oversee product development, international and domestic procurement, marketing and inventory management.
Kenneth W. Watson, Kmart’s executive vice president, marketing and product development, will report to Flick. Previously, he reported to Hall.
In a statement, Flick said, “I aggressively look forward to this opportunity. Focusing on the customer and improving our relationship with her will be our guiding priority.”
He was at Sears’ offices in Mexico on Thursday and could not be reached for further comment.
While Kmart has managed to improve sales this year, it has come at the expense of profit margins. The 2,172-unit chain reported an operating loss of $118 million in the third quarter, and some analysts have suggested that Kmart should close up to 500 of its underperforming stores.
Kmart also has been dogged by doubts about its solvency, although officials have repeatedly denied that a Chapter 11 bankruptcy filing was a possibility.
Despite Flick’s appointment, Kmart stock, traded on the New York Stock Exchange, closed at 7 3/4, down 1/8, on Thursday, a day when the market in general took its lumps. The Dow Jones Industrial Average fell 39.7 points.
For two years Flick has worked on trimming inventory at Sears de Mexico, lowering average price points and revamping advertising in an effort to enhance the 47-store chain’s image among value-conscious Mexican consumers.
Before rejoining Sears, Flick was a vice president and gmm at Montgomery Ward with responsibility for various soft goods and hardlines categories.
Kirk Palmer, president of Kirk Palmer & Associates, a search firm, said Kmart’s choice of Flick “was not one that would have popped to mind immediately for this position.” But he noted that Flick brings to Kmart a respected retail record, especially in the men’s and children’s areas, and “a reputation for being a strong leader.”
“I am surprised that it wasn’t a bona fide discounter, but by the same token [Flick] has experience with a big-volume, national operation,” Palmer said. “I think it was a pretty good choice.”
Palmer noted that Flick lacks broad discount store experience but added, “Floyd Hall has the discount experience. Warren has the merchandising experience. Together they should have at least a decent chance of making this thing work.”
Peter Schaeffer, an analyst at Dillon Read, said he believes Flick’s selection was a good move and would probably result in some “lightening” of Hall’s workload. Schaeffer follows both Kmart and Sears.
“He has a great reputation,” he said of Flick. “He did terrific things at Sears [in the U.S.], and he has done well in a difficult situation at Sears de Mexico. It was a good appointment, but he has a tough job ahead of him.”

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