Intimates takes a branded approach - Kmart Corp - Apparel Merchandising

Discount Store News, Dec 9, 1996

For Kmart, the solution to focusing intimate apparel lays in designating key classifications and reducing assortments so they become pointed merchandising statements.

This strategy is necessary throughout the store's apparel areas, but fine-tuning intimate apparel is perhaps even more daunting because it is a sku-oriented area with multiple sizes, product categories and strong consumer preferences. Reading those shopper desires correctly will make or break any editing effort.

"We've had a major, major sku reduction initiative in hosiery and bras. Fewer vendors, fewer skus," says Stephen Ross, senior vice president and general merchandise manager of soft lines.

While paring down the mix is obviously important in terms of clarity, Kmart's merchants have to be sure the items they do emphasize are the ones for which consumers clamor.

"What we are trying to do first and foremost is segregate full figure," says Terri Meichner, divisional vice president of lingerie and accessories, who is drawing on her experience as a buyer and merchandise manager for a number of retailers, including Montgomery Ward and Lingerie Cacique.

"We're going to tell them exactly where it is, put everything together and do branded statements anchored by Just My Size and Playtex," says Meichner, referring to her full-figure bra assortment for 1997.

Another priority is to make Kmart a destination for shapewear. Meichner notes that sales have been running 25 percent to 35 percent ahead of last year, and the retailer hopes to improve those increases by introducing new lines, including Playtex's Body Language. Kmart's shapewear category is currently anchored by Hanes products, as well as two seamless bras, Bestform's Invisibra and Kathy Ireland's Underbra.

Much of intimate apparel will be based on national brands because many have strong consumer followings based on image and fit. But Kmart is also planning to emphasize private labels such as Kathy Ireland and Jaclyn Smith. Meichner says the retailer plans to make some changes to Jaclyn Smith's intimate apparel line so that it has the same brand equity, for example, as it does in the ladies, ready-to-wear division. l think it needs to be tweaked from a fashion standpoint," she says. We're going to take something that we already have good recognition for and make it stronger," Meichner says, referring to Jaclyn Smith, which debuted in intimate apparel more than a decade ago.

Sleepwear this fall put in a poor performance at Kmart due to out-of-stocks caused by internal operational problems. But with the help of some novelty items - Winnie the Pooh nightgowns, Looney Tunes pajamas-meichner says sleepwear sales could greatly increase. The key is grabbing a customer's attention with a familiar character. "You can walk up to the rack and say Oh my God, I have to have this because it's so cute,'" she says. "Otherwise, there's no need for a new pair of pajamas when a customer can sleep in a T-shirt and pair of shorts."

In hosiery, Meichner is keying in on L'eggs products. Kmart has just finished a preliminary floor move where the L'eggs island was moved to the main aisle. We spruced up the graphics on it and changed around the adjacencies to get the maximum sales per square foot," Meichner says.

The goal of all these changes is, naturally, a better bottom line. "Terry's business is planned up aggressively in sales, but not as aggressively in gross margin rate because we've got some repricing issues that we've got to deal with," says Ross.

Another issue is stock accounting. Keeping items in stock will be no easy task until Kmart corrects problems with its inventory data. "It's a question of how we reconcile what we see with what shows on a system." says Ross. "We have serious out-of-package problems that distort our inventory."

The problem occurs, for example. when a customer decides to open a hosiery package to feel the product because she's unable to find the hosiery sampler. If she decides not to buy, "that stock is no longer salable. but the computer can't read that, can't understand that and so they're not reordering even though in effect that might as well be taken out of stock." Ross says.

Kmart's solution: physical inventory by size, color, and sku. "We're committed to doing it at least twice a year, starting next year," says Meichner. Physical inventories will dramatically help our business."