Kmart appoints outside executive to spearhead cost reduction program - Brief Article

Discount Store News, Oct 17, 1994

TROY, MICH. -- The realignment of Kmart's management team continued this month as Marvin P. Rich signed on as the retailer's new executive vice president, strategic planning, finance and administration.

He officially joins the No. 2 retailer today. Although his official duties are to oversee Kmart's financial accounting and information services, he also will spearhead the company's huge cost reduction program, tagged at $600 million to $800 million, said chairman Joseph Antonini.

Rich's appointment is part of Kmart's effort to invigorate the executive ranks with skills that can be used to help the company grow. Over the past four years, Kmart said that it has hired more than 30 key executives from both inside and outside the company.

Recent appointements to Kmart include Ron Floto as president of Super Kmart Center and executive vp of Kmart Corp., and Ken Watson as executive vp of marketing and product development.

Kmart also is reportedly looking for another top executive to serve as Antonini's No. 2 person. The search firm of Spencer Stuart & Associates, New York, refused to comment on a published report that it was hired to help Kmart find a new top executive to either work with Antonini or to replace him.

Kmart has stated its efforts to completely analyze and adjust its management structure to ensure that the right people are in the right jobs.

Concerning the Rich appointment, a company spokeswoman said, "we're reinventing our management strength to where they're needed."

In the past few months, Bill Underwood, senior vp, general merchandise manager, was moved out of merchandising to head the company's vendor and product development efforts; replacing him was Kevin Browett. Also, Richard Miller, formerly executive vice president of Kmart Stores was moved to exec vp of Super K a year ago and now is preparing to retire. Also, Kmart just announced that Tony Vale, divisional vp of merchandising, hard lines, has become divisional vp vendor merchandising, a new position.

Another key executive with a questionable future at Kmart is George Mrkonic, executive vice president of specialty retailing. As head of Kmart's specialty divisions, Mrkonic is presiding over an evaporating division. Although he has his hands full now with pre-stock offerings and later with the spinoff of all four businesses--OfficeMax, The Sports Authority, Borders/Walden and Builders Square--eventually he will either take on new responsibilities at Kmart or move on.

While Rich has not been deemed the No. 2 man to Antonini, his presence at Kmart is shaking up the reporting structure at the corporation.

Rich reports directly to Antonini. Reporting to him now are Thomas Murasky, exec. vp, chief financial officer--who previously reported directly to Antonini--David Carlson, senior vp, corporate information systems--who had been reporting to Joseph Thomas, executive vp Kmart Stores--and Orren Knauer, director of investor relations--who previously reported to Murasky.

Rich also will soon have another direct report: director of strategic planning, a new position still vacant.

Rich joined Kmart from Wellpoint Health Networks/Blue Cross of California where he was executive vp, specialty companies and executive vp, finance and information systems. He also has served in top financial, systems and strategy positions with California Federal Bank, Western Airlines, Jefferson Ward, The Broadway, Dart Industries and General Dynamics.