Kmart wants mom back, with kids in tow

NEW YORK – Taking a page from the Bed Bath & Beyond operations manual, Kmart is testing a program that gives its store managers more control over ordering key items and advertised items, Kmart chairman and ceo Jim Adamson said last week during a store visit to promote the company's new Joe Boxer program for home and apparel.

"We're going to roll it out slowly," Adamson said. "We want to make sure we keep control of the inventory, and we want to make sure the store managers are seasoned enough to take responsibility. But everywhere they're doing it, they're surprising us with what they can do."

That and other initiatives are intended to resolve what Adamson sees as the bankrupt retailer's No. 1 priority: winning back consumers.

"This company's Achille's heel has always been about disappointing customers from an in-stock point of view," he said. "The fact of life is that Kmart is a high-low retailer. We're a neighborhood store."

It's also a store that is clearly applying itself to wooing younger customers — a departure from the strategy espoused by recently deposed ceo Chuck Conaway, whose mantra was "We're the store for Mom."

Kmart's next merchandising priority is to develop an exclusive licensing agreement that will appeal to Latino shoppers, and afterward, a license to draw young African-American shoppers. Adamson said he hopes to announce the first "broad partnership" agreement within the next 30 days, although he would not reveal which departments would be targeted.

"It's not just that 40 percent of our customers are Latino and African-American. More important is that, if you cater to those customers and can take care of those customers, they're very loyal," he added.

Adamson said sales of Martha Stewart Everyday products have showed no dip despite Stewart's highly publicized stock-trading flap. The company has not curtailed any of its Stewart-related advertising, he added, and it's looking forward to rolling out the inaugural Martha Stewart Everyday holiday program this fall.

"Her consumer buys for quality, fashion and direction. That's it," Adamson said.