Viva Thalia! Kmart bets big on rising Latina star

DSN Retailing Today, August 18, 2003 by Emily Scardino

MIAMI -- Kmart has put its brand-dependent strategy to the test by executing what is arguably the most aggressive ethnic-label rollout the mass market has ever seen. Through its new partnership with Mexican pop sensation Thalia Sodi, including the launch earlier this month of a new apparel and home goods line under the same name, Kmart is positioning itself as the market-leading purveyor of Latino culture--a gamble that could either put Kmart years ahead of its competitors or drive it directly to the grave.

"We want to put the sizzle back into Kmart's assortment," said Joe Wagner, dvp of product development and trend at Kmart. "[We] feel her extremely trendy merchandise is a great value and will find an audience with Hispanic and non-Hispanic customers alike."

And, boy, does it sizzle. Thalia merchandise is beyond edgy and is definitely eye-catching--a far cry from its staid Jaclyn Smith line and moderate Kathy Ireland offerings. A leather, corset-influenced Thalia vest with lace-up sides for under $50 is just one of the many in-your-face key items positioned on the edge of the misses department.

"This is only the beginning of the kind of changes we are making in terms of our product offering," added Wagner, who joined Kmart in 2001, when he first served as director of production development in home. He is now taking up where Nick Just, Kmart's former gmm of apparel, left off.

Wagner and other executives attribute Kmart's still-popular Joe Boxer exclusive, which launched last back-to-school, with helping the retailer emerge from bankruptcy. Kmart hopes to ring up more dramatic results with this even more fashionable new offering comprising approximately 400 SKUs.

Apparel sales from new brands, in particular Joe Boxer, were part of what helped Kmart emerge from Chapter 11 status earlier this year. The company's new brand will be a key way for the retailer to get in touch with Hispanic and urban consumers. In terms of streetwear chic, it is the hippest available on the mass market by a long shot. It captures the high-end stylings of Baby Phat or J.Lo but at $19.99 for a pair of satin cargo pants. Like Sesame Street, Jaclyn Smith, Disney and Kmart's other brands, Thalia is considered another piece of the puzzle that management continues to assemble. Only when that puzzle is complete will Kmart's new image be apparent.

"Thalia is a great complement to our other lines, including Jaclyn Smith and Disney," said Julian Day, president and ceo of Kmart. "We are very excited about just how many excellent brands we can now offer our broad range of customers." In terms of aesthetics and age, Thalia is the antithesis of Martha Stewart, who has always shied away from endorsing an apparel line.

Furthermore, Thalia is Kmart's biggest commitment yet to being a Store of the Neighborhood. "Now store managers, for the first time, will have the flexibility to customize their assortments depending on where the brand is performing best," added Day.

Kmart selected a store in the melting pot of Miami to unveil its new offering on August 6th. No city in the United States is more in sync with Hispanic consumers, and they obviously find Thalia, and her merchandise, appealing--judging by the brisk initial sell-throughs.

Kmart's best local customers were invited to attend the event, and hundreds of fans did just that. Some even waited outside the store overnight to ensure they got front row seats to see Thalia. Reactions from the crowd to the star were rather stunning, with everyone from children to red-blooded young males shouting, "I love you, Thalia!" About 90% of attendees were Hispanic women between the ages of 15 and 45--obviously all fans.

These heated reactions to Thalia are the result of years of exposure with Spanish-speaking fans. Based on history and circumstances, she is poised to become an American superstar. Her 10th album, out this fall, is her first in English, and she already has a hit single, "I Want You," under her studded leather belt, as well as a duet featuring platinum hip-hop artist Fat Joe. Unlike the rest of Kmart's brand figureheads, her star is on the rise.

Getting it to rise even higher is something Thalia's husband Tommy Motolla, of Sony Records fame, will undoubtedly have a hand in. Motolla helped catapult his previous spouse, Mariah Carey, to superstardom and also launched J.Lo's platinum-laced career. His proven track record in creating Latina superstars is invaluable to Thalia--and to Kmart.

Though Day emphasized that Thalia is supposed to have widespread appeal among female consumers of all ethnicities, the fact that the line is only rolling out to 335 stores out of more than 1,500 stores speaks volumes.

"If Thalia makes it as a crossover artist, the line may expand to more stores," said Wagner. However, the hip-hop nature of the line makes it primarily suited to urban locales, with high percentages of ethnic residents.

However, even if Latinos are the only ones who purchase Thalia merchandise--which appears unlikely--the buying power of Hispanic consumers is nothing to sniff at. Not only are Hispanics the largest, fastest growing ethnic demographic in the United States, according to census projections, one in four consumers is projected to have Hispanic origins within the next 10 years.