BY LISA BIANK FASIG
The Cincinnati Enquirer
Kmart Corp., as part of a move to modernize stodgy stores and meet contemporary shoppers' needs, has given the blue light to an area conversion of its traditional stores into a new format. Big Kmart, a name that in time will replace virtually all regular Kmarts, marries some of the merchandising of Super Kmarts with the nuts-and-bolts merchandise of regular stores, in a format designed to make shopping as easy as getting to the parking lot. The conversions will be unveiled Sunday.
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Kmarts to be improved
Cincinnati-area Kmart stores to become Big Kmarts:
876 State Route 28, Milford.
12035 Lebanon Road, Sharonville.
4150 Hunt Road, Cincinnati.
5500 Ridge Ave., Cincinnati.
1780 Erie Highway S., Hamilton.
10560 Harrison Ave., Harrison.
12171 Parkfield Drive, Forest Park.
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"We had to make our locations more convenient," Kmart spokesman Steve Pagnani said. "And to give us the competitive edge, of course." Indeed. Rivalry among off-price merchants has essentially pushed Troy, Mich.-based Kmart out of the retail major leagues, analysts say. But its latest thrust should mean it can continue to operate profitably and, to a degree, competitively.
After all, this is the merchandiser that brought suburban America the 99-cent undershirt and yours-for-a-song dish drainers back in the 1960s. Kmart -- founded in the same year as Wal-Mart, 1962 -- helped lay the foundation for retailers such as Meijer and Target. Even if it is no longer considered in the same category as these contemporaries, observers aren't prepared to call it a dinosaur.
"They seem to be effecting a turnaround," said Sheldon Grodsky, an analyst with Grodsky Associates Inc. in South Orange, N.J. "I wouldn't write them off."
The local conversion affects seven Cincinnati-area stores, in Cincinnati, Milford, Sharonville, Hamilton, Harrison and Forest Park -- four stores in Northern Kentucky will finish the changeover in June.
The stores will remain the same size -- 84,000 to 120,000 square feet -- but for shoppers, the format should spell ease. Merchandise will be categorized into home fashions, apparel and toys, and what Kmart is calling "consumables." This last category, to undergo the greatest change, involves things a home absorbs -- from cleaning products to pet food -- and includes an expanded food area called the Pantry.
This consumables section is placed in the center of each store, reflecting product significance. Since these are items that shoppers stop in for with regularity, Kmart is making them easier to buy. The transformation -- one that observers say was required -- commanded an aggressive commitment, $600,000 a store. That translates to almost $500 million to date, as Kmart converted 786 stores since the program was implemented in 1996. In 1997, it will convert 525 stores.
But the program seems to be taking hold. According to analyst Jay Meltzer with LJR Redbook Research, Kmart's annual sales per square foot have risen to $211 in 1997 from $201 in 1996 and are in an upward trend.
"The truth is that had they done nothing, they would have been crushed by these two giants," Mr. Meltzer said. "The first point is they're alive, and they will be alive. They are no longer on the edge of dying, and they have found several things which they are utilizing to get into the big leagues."
But, he added, "They've got a long way to go."
