Byline: David Moin

NEW YORK — Struggling to shore up its core discount operation, Kmart is bringing in new talent and searching for a number-two executive to work with chairman Joseph E. Antonini, and possibly succeed him, sources said Wednesday.
The sources noted that in the event of a succession, Antonini — who is also president and chief executive officer — would step aside after a lengthy transition.
The search is being conducted by Spencer Stuart & Associates.
Antonini, who is 53, has been pressured by shareholders and the board to revive Kmart’s sagging discount stores. Speculation has been raised about how long he can hang onto his job, but market sources don’t expect him to leave this year. Antonini’s whole career has been at Kmart.
In a WWD interview last June, he said he had the support of the board. He could not be reached for comment Wednesday.
A well-rounded executive with operational and merchandising skills is reportedly being sought, and sources said that Target, J.C. Penney, Wal-Mart and Sears, Roebuck will be among the first stores probed for candidates.
Kmart does not have a chief operating officer, traditionally the number-two post in retailing.
In another key appointment, Kmart is expected to name Kenneth Watson to a senior-level marketing and product development post.
Watson is currently president and chief executive officer of Little Switzerland, a specialty retailer operating more than 30 duty-free luxury goods stores in the Caribbean and Alaska. Watson was president of Cartier U.S.A. and president of Gumps. Although his experience is in high-priced retailing, Watson is said to be close to Antonini on a social basis.
Kmart officials would not comment on Watson or the search for a number-two executive.
However, a spokeswoman said, “Kmart has indicated it is involved in a top-to-bottom analysis of executive staffing to determine if it has the right people in the right jobs to meet the needs of its business. At our annual meeting, Mr. Antonini emphasized that the process had commenced and should continue in the months ahead and when asked if it could include the office of president, chairman and ceo — his titles — he said it would, and that there are no sacred cows.” The next level of management reporting to Antonini includes Joseph R. Thomas, executive vice president of U.S. Kmart stores; Ronald Floto, president of Super Kmart Centers and executive vice president of Kmart Corp., and George R. Mrkonic, executive vice president of specialty retailing.
Reporting to Thomas is executive vice president of merchandising Donald W. Keeble.
Kmart, the nation’s second-largest retailer with $34.1 billion in sales last year, reported that in the second quarter ended July 27 operating profits at the U.S. Kmarts and Super Kmarts fell 18.6 percent to $201 million.