NEW YORK — Kmart Holding Corp. says it’s being “strategic” about its spring ordering, but some of its vendors have another word for the approach — slow.
This story first appeared in the November 3, 2003 issue of WWD. Subscribe Today.
While many of its competitors, such as giants Wal-Mart Stores and Target Corp., have been busy putting through orders for the spring season, apparel vendors say that Kmart currently is sitting on its hands and on confirmation of many spring orders. Their nervousness was recently exacerbated by the departure of Michael Lewis, who had been divisional president of women’s wear.
Manufacturers characterize the Troy, Mich.-based discounter, which emerged from bankruptcy nearly six months ago, as hemming and hawing its way into the holidays and using corporate reorganization and a review of early 2004 merchandise as a cover for procrastination and lack of direction.
As reported, Kmart two months ago named former Gap executive Lisa Schultz senior vice president and chief creative officer, reporting to chief executive Julian Day. She is expected to work closely with a chief merchant at Kmart but that post, as has been the case for several years, has yet to be filled.
A Kmart spokeswoman said that the slow pace of spring ordering was due to nothing more than Schultz and the new team she’s assembling getting a handle on what’s store-bound for next year.
“Because of the changes in the Kmart merchandising team, we were being strategic about the apparel assortment that would appear in our stores for spring 2004,” she said. “The process involved evaluation and reviews of the proposed spring lines, which delayed confirmation of vendor orders.”
Some apparel vendors didn’t seem reassured by that and are complaining that Kmart isn’t even confirming orders that were already placed. Manufacturers’ fear of being stuck with unsold good has grown in the last month, with some questioning how much longer they should wait before they look elsewhere for business.
The Kmart spokeswoman, however, emphasized that by now a “majority of the orders have been confirmed” with our vendors and that “deliveries are not in jeopardy.”
Non-apparel vendors say that they haven’t experienced anything unusual with the rate of orders placed by the store, so the issue with unconfirmed orders is peculiar just to apparel firms.
At least one apparel vendor, whose sales associate just returned here from a meeting with Kmart, wasn’t appeased by news of the confirmation of a “majority” of Kmart’s orders.
The vendor said, “We were told that orders are not being placed right now and that the buyers would need to speak with its product development team. From what I understand, it is the new team that will place orders from now on. They couldn’t even tell us how long we should wait for an answer.”
She added that even after speaking with the Kmart buyers, her firm had more questions than answers for the retailer: “We don’t know what the product development team does, who to contact there, how long it takes for them to make a decision and whether, maybe, we should make our pitches directly to the team. The buyers didn’t have any answers. I don’t know what that means for the buyers.”
The Kmart spokeswoman declined to provide additional information about the group operating out of New York, but a source said that the new “20-person team” will be responsible for placing orders and that “part of its focus is to identify trends and then make sure the right product is on the store shelves to reflect those trends.”
Also working with a more in-depth focus on women’s apparel these days is Kathy Douglas. According to the spokeswoman, Douglas has been on staff at Kmart for 18 years working in the field and as a buyer. Douglas’ title remains director of trend and product development for women’s wear but suppliers say she has assumed some of the responsibilities previously held by the departed Lewis.
Kmart, meanwhile, is awaiting completion of new offices here for the product development team, which sources said is in the Chelsea district.
The Kmart spokeswoman, unable to confirm the location, said, “Kmart Holding Corp. has signed a lease for approximately 6,000 square feet of office space in lower Manhattan that will be used by a design and trend team, reporting to Lisa Schultz.”
Some, though certainly not all, of the confusion can be traced to Kmart’s previously stated goals of doing more offshore sourcing and developing more proprietary products, such as the Joe Boxer and Thalía collections that it hopes can duplicate the success it’s had with Martha Stewart.
Skeptics continue to believe, however, that the retailer has an uphill battle.
Last month it unveiled a new marketing campaign, which features snippets highlighting Joe Boxer, Thalía and Martha Stewart.
Ed Nakfoor, a retail consultant who works not far from the discounter’s headquarters, observed: “I think that there’s a lot going on in the campaign, where Kmart is trying to be all things to all people. They try to cover all markets, but I know that I can’t even get Thalía apparel at my local Kmart.
“Kmart still hasn’t created any sense of its relevance to the consumer. So what if I can get funky Joe Boxer and Martha Stewart? How are those brands relevant to me? The retailer still has to have some big brands. Kudos to Kohl’s for its deal with Estée Lauder. I would like to see Kmart do something like that,” he said.
If Kmart does have a strategy, it certainly isn’t telling anyone, observed apparel industry consultant Emanuel Weintraub.
“Kmart hasn’t yet come forward with a clearly defined strategy of how it is going to survive sandwiched between Target and Wal-Mart. It appears that this company is on life support. If that plan never materializes, Kmart is in a long-term terminal condition,” he said.