350 days — and counting

Jennifer Negley, Staff Staff, May 21, 2001

In what was a surprisingly spirited shareholders' meeting — replete with associates cheering "blue! light! blue! light!" — Kmart chairman and ceo Chuck Conaway made it abundantly clear that he represents a new era at the chain.

Just a few days shy of his first anniversary with the company, Conaway riffed through a list of fix-its that have taken place since his arrival and then pointed squarely toward the future. Both in terms of content and presentation, the meeting marked a departure from the past.

Focus: In days of yore, Kmart's annual meeting devoted a healthy portion of time to highlighting the part of the business that works best — the house branding strategy. Not so this year.

Instead, Conaway concentrated on operations and supply chain initiatives. The message was clear: This regime is bearing down on execution — long Kmart's Achilles' heel. Kmart is investing $1.7 billion on 93 projects designed to shore up the back end of the business, including a $600 million contract for next-generation, web-enabled IBM registers that will roll out across the store base over the coming year.

Objectives: Whether in matters of pricing, internal processes or positioning, Kmart's goal in recent years has been to place itself in the ballpark with its competitors. Conaway's ambitions run higher. "World-class" results are what he's after — whether in customer service (he wants 70 percent of Kmart shoppers to rate the store as "excellent"), in-stocks (now at 88 percent, Conaway wants 92 to 95 percent) or on-time resets (40 percent a year ago, now 90 percent, with a goal of 100 percent). The subtext: He's not interested in making the chain just as good as the other guys; he wants it to operate at the highest standard.

Frame of reference: The nomenclature of the past regime has apparently gone out the window. Kmart stores are referred to as Kmart stores, not as Big Ks.

Key phrases in new Conaway songbook: "world-class execution," "customer-centric culture," "best practices" and "I'm a team kinda guy."

Crib from the best: At moments, the news being delivered in Detroit carried a distinct Bentonvillian flavor. The drive to install top-drawer technology to speed movement along the supply chain, improve in-stocks and satisfy customer demands (a long-time strength of you-know-who). The announcement that through a new initiative called Bluelight Always permanent pricing reductions have been made on 4,000 items (a roll back by another name). The renewed focus on item merchandising to improve frequency (Arkansas calling). And the new store policy that requires associates to begin each day by shouting out the Kmart cheer (gimme a W — whoops, make that a K!).

Not that anybody should get bent out of shape by that. Home Depot in the U.S. and Asda in the U.K. (now a Wal-Mart subsidiary) both frankly acknowledge that they organized their businesses by emulating parts of the Wal-Mart formula.

If Conaway can make it all happen, he'll have accomplished something tremendous. In the meantime, he managed last week to do something equally remarkable — he made it seem possible.

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