Antonini reveals K mart's vision: be most efficient retailer in U.S - Joseph Antonini

Discount Store News, May 9, 1988

Antonini Reveals K mart's Vision: Be Most Efficient Retailer in U.S.

NEW YORK--New forms of retailing, extensive automation, and the physical presence of 128 million square feet of retail space are the blocks upon which chairman Joseph Antonini is building the K mart of the 1990s.

"The most successful retailers in the United States tomorrow will be the ones with the most-effective, low-cost base of operations in place," said Antonini to more than 140 analysts and reporters at a meeting sponsored by The New York Society of Security Analysts on April 28.

Antonini said that "K mart will have the most advanced, pro-active, complete 21st century data collection and communications system in the entire retail field." By 1990, each of the 2,200-plus K mart stores will be able to record every sale of every item each day and to transmit that data via satellite to the chain's Troy, Mich., headquarters.

Implementation of the chainwide point-of-sale system, along with a satellite communications network, will enable K mart to centralize merchandising functions at headquarters. Antonini said that hosiery recently was added to the centrally merchandised apparel system. The chain plans to soon add bed & bath and curtains & drapery to the apparel system, he said.

In the hard goods area, K mart headquarters this year will assign, or centrally merchandise, more than $5 billion worth of goods, up from less than $2 billion in 1986. By early next year, all advertised and seasonal merchandise in the hard goods area will be centrally merchandised.

On Feb. 1, K mart placed its small appliances department on a centralized merchandising system. Since full implementation of the program in late February, small appliance sales were up 33 percent and gross margin rose 2 points in the eight-week period.

Next year, as much as 75 percent of all merchandise sold in K mart stores will be centrally merchandised.

Antonini reported that the first 244,000-square-foot American Fare hypermarket, to open in Atlanta late this year or early in 1989, will be followed by four other units in the 120,000- to 160,000-square-foot range by 1990.

Makro, K mart's recently-acquired warehouse club operation, will be expanded rapidly from its current five stores, while "simultaneously instituting a serious reorientation of the general merchandise part of the business.

"We also see groceries playing an important part in our mix in K mart stores in the near future," said Antonini, revealing how the chain's discount stores might benefit from Makro's food expertise.

Antonini's "vision" calls for the addition of more and larger stores to K mart's real estate portfolio. In 1988 and 1989, K mart will enlarge 100 small- to medium-size stores, and at least 100 new K mart stores, most of which will be full-size units, will be opened.