Kmart Essay

4265 words - 17 pages

HISTORY OF KMART CORPORATIONSebastian Spering Kresge founded Kmart Corporation in 1899 under the name of S. S. Kresge in Detroit. By 1912, S. S. Kresge comprised of 85 stores with sales in excess of $10 million. Kresge stores appealed to shoppers by providing low prices, open displays and convenient locations. The stores were the largest retail stores for that period with store layouts between 7,000 and 19,000 square feet.Kresge was a retailing leader by locating in the first suburban shopping center in Kansas City in 1929 and launching a newspaper-advertising program in the early 1930?s. Print advertisements still dominate Kmart?s advertising with over 70 million circulars weekly inserted in more than 1,500 newspapers nationwide.In 1962, the company opened its first discount Kmart store in Michigan. By 1966 there were 162 Kmart stores in operation. The Kmart stores were larger comprising of 50,000 - 70,000 square feet per store. Kmart continued accelerated growth throughout the 1960?s and 1970?s and by 1977 comprised 95% of S. S. Kresge sales. The company was changed to the Kmart Corporation in 1977.This growth was achieved primarily through innovative private label development and expanded product mix. His introduction of the Jacqueline Smith line of women?s apparel increased customer traffic, which led to stronger same store sales growth. Other celebrity endorsements have since included Martha Stewart, Kathy Ireland, Mario Andretti and Fuzzy Zoeller.Success at Kmart apparel was due largely to the merchandise selection that appealed to a larger customer base. The apparel merchandise mix was changed to appeal to the 25-45 year old customer, the budget conscious mom. By expanding the customer base, Kmart?s strategy was to retain the $25,000 family income customer and target the income level consumer up to $50,000 as well. In addition, Kmart apparel started carrying some of the more recognized mass merchandise brands such as Wrangler, Hanes, and Fruit of the Loom. Jaclyn Smith. Martha Stewart, Kathy Ireland and other private labels were added later for the $25,000 - $50,000 income customer.When Mr. Joseph Antonini became Chief Executive Officer in 1987, he found Kmart facing a most challenging retail environment. During the past two years, a slow economy limited pricing flexibility. Although the United States market had seen a steady rise in retail sales during the previous decade, retail sales as a percent of disposable personal income was in a sharp decline.The most critical threat to Kmart was from competitors. Several competitors began to enter Kmart territories in the early 1980?s. The first was Wal-Mart, which was then a relatively small discount retailer from Arkansas, which provided customers the "Lowest Prices - Guaranteed". Over the past several years, Kmart had watched Wal-Mart?s rapid growth from a rural discount operation-serving Arkansas to a national player that threatened an increasing area of Kmart?s territory. In addition, Target...

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