Byline: David Moin

TROY, Mich. — With stores that are often messy, inadequately merchandised and weak on image, Kmart Corp. on Wednesday put out the help-wanted sign to fill the two top posts in marketing and operations.
While seeking new executives, Kmart’s new chairman and chief executive officer, Chuck Conaway, indicated he’s not shaking up the whole pot, and elevated Kmart veteran Andy Giancamilli, a respected merchant, to the new position of president and chief operating officer.
However, Jack Smailes, senior vice president and general merchandise manager for apparel, left the company this week. His position was eliminated.
On a lighter note, Conaway has instituted business casual attire at Kmart headquarters in Troy, Mich., to further calm the organization during this critical transition period. (As previously reported, the company plans to close 72 weak stores, mostly by November, and believes that its second-quarter and yearend results will fall below expectations.) The new office dress code goes into effect Monday, and to give the Kmart crowd some ideas, a fashion show, even featuring some Kmart goods, was staged Wednesday in the corporate cafeteria. No more ties are required.
Under the staff reorganization, Giancamilli reports to Conaway and will be responsible for all aspects of merchandising, store operations, marketing and logistics. Conaway said that Giancamilli, as chief operating officer, “will ensure that merchandising, marketing and supplying our product lines are directly linked with store-level execution, which is critical as we strive to dramatically improve our retail execution and customer experience.” Giancamilli was president and general merchandise manager of U.S. Kmart stores. The position of chief operating officer has been vacant for some time at Kmart.
Also, Cecil Kearse was promoted to executive vice president of merchandising for all product categories. Kearse, who will report to Giancamilli, has experience in apparel and home fashions and was instrumental in developing Kmart’s Martha Stewart product line. “It indicates Kmart’s commitment to making Martha Stewart an even bigger part of the store,” said Gilbert W. Harrison, chairman of Financo Inc., an investment banking firm. “Kmart’s emphasis on home and success with Martha Stewart has allowed it to differentiate itself from Wal-Mart and Target.
“I don’t think Chuck Conaway is going to shake up everything,” said Bob Kenzer, chairman of Kenzer Corp., an executive search firm. “The announcements Wednesday indicate to me that he is trying to secure the organization.”
Kenzer added that it’s not unusual to name one executive over store operations and merchandising at the same time. There’s a similar structure at J.C. Penney, with Vanessa Castagna serving as chief operating officer and executive vice president of stores, merchandising, e-commerce and catalog.
Kmart, Conaway added, is searching for a chief marketing officer who will “strategically align” advertising, all marketing, in-store presentations and displays, develop a better understanding of the Kmart customer and report to Giancamilli.
Conaway noted, “We are looking for a world-class marketing leader who can leverage the significant assets of Kmart and challenge our senior team to develop a compelling marketing position that creates a sustainable bond with our customers.”
Currently, Kmart has a loose bond with customers, held primarily by a handful of strong marketing programs, including the Martha Stewart Everyday collection of home and outdoor products, and Sesame Street licensing deal for children’s.
Conaway’s appointment as chairman and ceo last month, succeeding Floyd Hall, surprised the industry. He’s not a merchant and is an outsider to the mass discount channel. He was president and chief operating officer of the CVS drug store chain and before that, chief financial officer of CVS. He’s considered a strong strategist, which is most important as Kmart searches for the right niches to seize upon, and is strong in areas where Kmart needs help, including systems and logistics.
Even more formidable than fixing up the stores, a bigger challenge for the nation’s third largest chain is how to survive against Wal-Mart and Target and find differentiating products and a different appeal beyond the exclusive Martha Stewart and Sesame Street programs. Over the past decade, Wal-Mart and Target have come on strong, rapidly expanding and increasing market share at the expense of other chains.
In other Kmart changes on Wednesday, Donald W. Keeble, president of U.S. Kmart store operations and a 29-year veteran of the company, has retired. He was responsible for all aspects of store operations as well as real estate, facilities management, design and construction and corporate purchasing. He was also instrumental in the rollout of Big Kmart stores. Kmart operates 2,165 Kmart, Big K and Super Kmart stores.
David Rots, executive vice president of human resources and administration, and Michael Bozic, vice chairman, continue to report to Conaway.
Kmart is also seeking a new ad agency. The review is expected to be complete by Sept. 1, with new promotional and brand-positioning campaigns in place for the fall and holiday shopping seasons.

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