BOSTON — Lisa Schultz, Kmart’s chief creative director and senior vice president, describes her new gig as “very entrepreneurial.”
This story first appeared in the November 6, 2003 issue of WWD. Subscribe Today.
“I’m not layering on too many rules before I understand how things work,” she said, referring to several open issues — like who she will hire and who will move from Michigan to join her New York-based design team. “Right now it’s about figuring out how to get the job done.”
Amid rumors of shifting protocols, Schultz emphasized that Kmart’s basic buying channels are working as usual. As reported, some vendors were getting concerned about slower-than-usual buying patterns for spring, but Schultz said she had reviewed the spring buy and noted it was on track. Additionally, she said, “The merchants are physically making the buys for fall .”
In her role, a new one for the retailer, she is charged with providing a design vision for all apparel categories and the soft goods portion of home furnishings. She categorized her relationships with vendors as “strong” and said she’ll be continuing a series of conversations to hear pitches, feedback and ideas.
Schultz leads the 40-person trend and product development team, working as a bridge between marketing and sourcing. She will eventually work under a chief merchant, a vacant seat the retailer has been slow to fill.
A string of divisional vice presidents, who oversee the buying teams, will also report to the chief merchant. The women’s wear post has been vacant since Michael Lewis left. Some of Lewis’ duties were assumed by Kathy Douglas, director of trend and product development. In the meantime, Schultz reports to president and chief executive Julian Day.
While she has yet to hammer out all the strategic details, she does have an answer for the pressing “big question:” In a “Tar-Mart” world, what is Kmart?
“I can’t speak [about] our competitors, but Kmart definitely has an urban mind-set,” she said. “That’s not just about people who listen to hip-hop and live in the Bronx. There’s an urban message reflected across the country. We’re focusing on the new, multicultural American family.”
The Thalía line, launched with Latina singer Thalía Sodi in a Miami store in August, has become the exemplar for the momentum Kmart hopes to continue: to create proprietary lifestyle specific collections that speak to customer niches. Although only in 335 of Kmart’s 1,512 stores, the Thalía line is expected to do as much as $500 million in its first year.
Still, when asked if some lines will disappear to give stronger, fresher properties like Thalía and Joe Boxer more elbow room, Schultz was cautious. “I think all the brands have a place,” she said. “I’m working to make each more recognizable. So a customer can stand in the Jaclyn Smith department and know right away what to buy.”
It’s difficult to discern the size and scope of Kmart’s apparel business, although its store base and annual $30 billion in net sales make it a significant player. The company does not publicly break out data by category, or even distinguish between hard and soft goods, said a spokesman.
The company reported a $5 million loss on net sales of $5.6 billion for the quarter ended July 30. Net sales were $7.1 billion for the same period a year ago, although losses were significantly steeper at $293 million, partially reflecting under-performing stores that were still open.
The company is still tabulating results for its third quarter, which closed Oct. 29.
In two months on the job, Schultz has not only been entrepreneurial, but exceedingly busy.
She’s scanned spring assortments, spent several weeks at Troy, Mich., headquarters planning fall, selected new design offices in lower Manhattan (the company is still mum on the exact location) and reshuffled the preholiday arrangement of the women’s wear floor.
Her “to do” list includes:
- Prune product redundancies.
- Clarify brand identity.
- “Raise the aesthetics of the shopping experience.”
“We have some great products,” she reflected. “I don’t think that’s coming across when you’re in the stores. That’s a big part of where I’m focused and where you’ll start to see change quickly.”
She’ll get no argument with that goal. Analysts and consumers alike criticize Kmart’s too-often dim, dirty and disorganized stores. A cleaner shopping experience, with better sight lines and lighting could do worlds of good.
Pulling together a clean presentation is presumably a Schultz forte. She spent 14 years at Gap, rising to head of global product development and design, helping formulate the simple and elegant floor sets that are the retailer’s hallmark.
“In the past, [Kmart] pasted big signs everywhere and that’s not how we want the store to read,” she said. “We want consumers to see compelling merchandise and then notice it’s at a great price.”
That strategy, more akin to Target’s in using design rather than price as the hook, might keep the retailer from being flattened by Wal-Mart’s “Everyday Low Prices” steamroller.
Last week, as a precursor to holiday, Schultz swiftly rearranged the women’s wear floor. She broke up blocky racks of similar merchandise by interspersing related items. In one example, she plucked candy-colored scarves and matching hats out of the accessories area and merchandised them with coats and sweaters.
That kind of presentation is “more dimensional, more aspirational” — and more in keeping with her big picture for soft goods departments. New fixtures are on her wish list, but the more immediate task will be to weed through sku counts for the various brands.
Laissez-faire oversight on what was supplied by vendors and what was designed in-house led to “so much overlap,” Schultz said. As well, it created gaps where the retailer has an opportunity, she believes.
To that end, she’s written a list of defining categories that “make Kmart Kmart,” and will be broadening the assortment there. Citing competitive reasons, she declined to specify those items.
As Target continues to excel in vision and Wal-Mart improves its game, Kmart needs its stores to look attractive and project the confidence of a viable business concern.
Schultz said it is possible for Kmart. She took the job, she said, believing mass retail is “the next big thing for the apparel industry.”
Although its purchasing power has been clipped by the bankruptcy and store closures, Kmart still controls some real estate gems, including two Manhattan locations, on West 34th Street and Astor Place. Sites such as these will either be the nucleus from which Kmart rebuilds its future, or makes its last stand.
Fittingly, Schultz is currently working out of one such location — her temporary offices are located above the Astor Place store.