| Help wanted: Kmart, the nation's third-largest discounter, seeks a savvy executive capable of discovering up-and-coming brands and creating a merchandise mix to excite customers and arouse envy among competitors. If you know where to find the next Martha Stewart or Joe Boxer, this is the job for you.
One month after it emerged from Chapter 11 bankruptcy protection, Kmart Holding Corp. still is without a permanent chief merchant, someone to decide everything from the look of the 1,513 stores to the thread count of the Martha Stewart Everyday sheets.
The Troy retailer has filled several key positions in the past few months: a new treasurer, general counsel, asset protection chief and three divisional merchandising vice presidents.
But the chief merchant job is the one that must be filled if Kmart is to give shoppers a reason to bypass Wal-Mart Stores Inc. and Target Corp. and reverse the decline that has seen sales tumble over the past three years.
The chain went from selling $37 billion worth of merchandise in 2000 to $30 billion in 2002. The retailer predicts sales of $25.4 billion this year.
Steven Nevill, national director of merchandising for Kurt Salmon Associates, an Atlanta-based retail consultancy, calls the chief merchant post, "the most crucial job there is in a retail organization."
"The bottom line is if you make the wrong call about product or on price, you're going to be in a mess," Nevill said. "It doesn't matter how nice your stores are or how good your advertising is."
In Kmart's case, the chief merchant also will help decide which features in the prototype store in White Lake Township will be rolled out across the chain.
Finding a chief merchant won't be easy, said Terre Simpson, president of Simpson Associates, a New York executive search firm. Kmart needs a veteran who has a record of success, but cutbacks in retail training programs and better-paying jobs in other industries have led to a chronic shortage of talent, Simpson said.
"It's always been a problem, but it's more apparent now, because so many retailers are struggling," she said.
On top of that, Kmart's recent bankruptcy and what seems like the lack of a clear merchandising strategy might scare off candidates, said Elaine Hughes, president of E.A. Hughes & Co., a retail search firm in New York.
"How many people with a decent track record want to get involved with a company so broken they may not be able to fix it?" Hughes said.
Last June, William Underwood came out of retirement to help with the retailer's turnaround and serve as chief merchant on an interim basis. Kmart watchers say Underwood knows Kmart and its customers. His tenure started in 1962, when S.S. Kresge Co. was transforming itself into Kmart.
Underwood, 62, is not in the job long term, however, and is handling other duties as executive vice president of sourcing and global operations. Julian Day, Kmart's president and chief executive officer, said he wanted to bring in a permanent merchandising chief by the time the retailer left bankruptcy.
The search for Underwood's replacement is ongoing, said company spokesman Jack Ferry. There is no deadline for finding a permanent merchandising chief, he said, and Kmart continues to add new merchandise such as Joe Boxer comforters and a line of extra-plush Martha Stewart sheets and towels.
"Since April, we've made a lot of personnel additions to build up our management team," Ferry said. "We're getting the foundation of the company fixed and focusing on some of our financial issues."
Ulysses Yannas, an analyst with Buckman, Buckman & Reid in New York, expects Kmart will have a permanent chief merchant by the end of the year. In the meantime, Underwood is doing a good job, he said.
"They don't need to change what they're doing, just let it evolve and improve," Yannas said.
Last month, Kmart gave merchandising executives Robert Atteberry, Joyce Dillon and Peter Whitsett additional responsibilities. All three report to Underwood and will report to the new chief merchant.
The promotions suggest to Yannas that the company isn't looking for someone to come in and completely overhaul the merchandise mix. Otherwise it would have let the new merchandise chief assemble his own team, Yannas said.
The retailer's apparent lack of progress in naming a permanent chief merchant troubles Howard Davidowitz, chairman of Davidowitz & Associates, a New York retail consulting firm. Kmart is losing market share steadily to Wal-Mart and Target and cannot afford to wait the nine months it could take a new chief merchant to make a difference, Davidowitz said.
"He needs time to study the company and its stores," Davidowitz said. "He can't just start making changes. Otherwise, he could make things worse."
Kmart's same-store sales, a key indicator of a retailer's health, fell 3.2 percent in the first quarter ended April 30. That's on top of a 10.1-percent drop in 2002.
Kmart posted a same-store sales increase of 1.1 percent in April, but that was compared to a 16-percent drop in April 2002.
Already it's too late to have an impact on the crucial Christmas selling season, Davidowitz said. Holiday merchandise, from sweaters to Christmas decorations, is on order.
Whomever Kmart picks for the chief merchant slot will probably spend a lot of time at the White Lake Township store. Last fall, the discounter unveiled a much ballyhooed revamping of the store in the northern Oakland County community. It said it would assess customer reaction to a wide variety of changes, including a lime green color scheme, wider aisles, improved lighting and better signage. Kmart made similar changes to stores in the Peoria, Ill., area.
The retailer still is determining which changes, if any, it will roll out chain-wide, spokesman Ferry said. |
