Kmart wants to boost visits in urban markets

Kmart hopes to tempt its best customers to return to its stores byby rolling out a raft of new Martha Stewart product lines and byexpanding its private-label brands to appeal to African-American andHispanic customers.

"We're not going after the Wal-Mart or the Target consumer,"Steven P. Feuling, senior vice president of marketing for KmartCorp., said in an interview Tuesday.

Instead, Kmart, struggling to reorganize under bankruptcyprotection, will make the most of its longtime presence in urbanmarkets, which Target and Wal-Mart have largely avoided.

Kmart will continue to operate 44 stores in the Chicago region,including seven within the city limits, which makes Chicago theretailer's second-largest market.

The Troy, Mich.-based retailer counts on African-American andHispanic shoppers for 40 percent of what the company calls its"loyal" customer base, and for 33 percent of its $37 billion inannual sales.

"We have an entire group dedicated to multiculturalmerchandising," Feuling said.

Besides the all-powerful Martha Stewart Living, the most popular,exclusive products and apparel lines at Kmart are those from Disney,Sesame Street, Joe Boxer and Route 66.

Kmart intends to expand those product lines in an effort to boostthe number of shopping trips its best customers make from an average2.3 each month to 3.2 each month. That would add $1 billion toKmart's bottom line, said Dave Karraker, vice president of corporatecommunications for Kmart's online division, bluelight.com.

Joe Boxer, known as a men's and boy's underwear label, willintroduce a full line of juniors and young men's apparel andhousehold items for the "dorm market" in Kmart stores, Feuling said.

Estilo, a girls' sportswear and ladies' apparel label, will expandits product line to men's, boys and infant wear by this fall.

And a new Martha Stewart category will be introduced every sixmonths. The most recent introduction of mirrors and candles will befollowed this fall by Martha Stewart holiday decorations.

The Martha Stewart Everyday brand generated sales of $1.6 billionlast year, a 26 percent increase over 2000.

Of course, none of the marketing strategies will work if Kmartfails to improve the basics: stocking shelves, keeping stores clean,and improving its customer service.

The retailer is working to improve those areas, partly byreturning to the old strategy of letting store managers determinewhich products to feature in their Blue Light Specials, Feuling said.

No single retailer is delivering everything customers need in bothapparel and housewares, and that's where Kmart will stake its future,he said.