The Associated Press
DETROIT - The board of Kmart Corp. on Sunday named a new chief executive to replace James B. Adamson, the company director named last year to shepherd the troubled retailer's bankruptcy reorganization.
Kmart President Julian C. Day will assume the top job, while Adamson will remain as non-executive chairman through the final months of the company's Chapter 11 bankruptcy, Kmart said in a statement. Day will retain his duties as president.
His appointment comes as the Troy, Mich.-based retailer begins to shuffle its management ahead of its expected exit from Chapter 11 by April 30. Adamson and Day were not available for interviews Sunday, the company said.
Adamson, a Kmart board member since 1996 and former chief executive at Burger King Corp., was named chairman in January 2002 and CEO three months later.
Day, 50, joined Kmart as president and chief operating officer in March. Previously, he was chief financial officer at Sears, Roebuck and Co. and Safeway Inc., the supermarket chain.
Kmart filed for Chapter 11 bankruptcy protection in January 2002. Two months later, the company said it would close 283 stores, affecting about 22,000 jobs.
On Tuesday, the retailer announced it planned to close another 326 stores and eliminate 37,000 jobs. If a federal judge approves those closings, Kmart will have about 1,500 stores, a third less than when it declared bankruptcy.
Kmart said the closings will result in a charge of $1.7 billion, most of it in the fourth quarter of fiscal 2002. The move also will increase the company's cash flow by about $500 million this year. Kmart also said it has lined up $2 billion in financing for after it leaves Chapter 11.
The board acted now to give Day enough time to choose additional members of Kmart's post-bankruptcy management, including a chief merchant and general counsel, as well as permanent financial leadership, the company said.
"I am honored that the board has asked me to serve as chief executive as the company repositions itself for the future," Day said. "Having the opportunity to address in the most senior leadership role the challenges Kmart currently faces is indeed exciting to me."
Kmart's stock was delisted from the New York Stock Exchange last month. The company's common stock will have no value once Kmart leaves bankruptcy.
"As we head down the home stretch of our Chapter 11 reorganization case and prepare to emerge, I have great confidence in Julian's ability to lead this company and its associates to their position as a world-class competitor in the retail landscape," Adamson said.
After replacing Charles C. Conaway as chief executive in March 2002, Adamson recruited Day as president and chief operating officer.
Adamson stabilized Kmart immediately after its bankruptcy filing, although his plans have not yielded positive sales, said Burt Flickinger III, managing partner of the Strategic Resource Group, a management consultant.
"But he had been involved in the selection of Chuck Conaway and the people who presided over the problems that caused Kmart to collapse," he said.
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