Apparel rebuilds from lackluster '93 - Kmart apparel department - Kmart Power Merchandising

Discount Store News, Feb 21, 1994 by Susan Reda

Despite the criticisms being leveled against Kmart for many kinds of shortcomings, the chain's apparel business is poised for success.

Of course, that forgives Kmart for its less than stellar performance in 1993, which saw retail analysts faulting the chain for everything from declining gross margins to sending mixed signals to shoppers and not meeting consumer expectations on the fashion front.

But a number of analysts, vendors, and consumers believe Kmart executives are headed in the right direction with their apparel strategy. Many changes laid out by chairman Joseph Antonini in 1990 when renewal started have begun to pay dividends--albeit slowly, due, in part, to a recessionary economy, cautious consumers and angry Mother Nature.

New and renewed stores get high marks for presentation and seem to be luring busy, budget-minded moms to reach a bit deeper into their pockets. And Kmart's commitment to emphasizing quality, price and fashion manifested itself in the establishment of its new quality assurance program, the introduction of more name brands and the upgrading of private label lines.

"Kmart's product development, particularly in fashion, and its quality control are among the best in the mass market," said Issac Lagnado of Tactical Retail Solutions, a New York-based research and consulting firm. "They are on the right track and have the potential to gain market share in apparel. I don't believe that 1993 is indicative of Kmart's strength and opportunities in apparel."

Neither does Bob Luehrs, president of marketing for Chic/H.I.S. jeans, and one of Kmart's largest suppliers. "The strategy is sound, but the results are not coming as quickly as Kmart executives and most of Wall Street had hoped. Six or seven years ago, Kmart sold cheap goods at cheap prices. Now they're selling high-quality, on-trend fashion merchandise at prices that continue to represent value to consumers."

With Kmart executives holding fast to their campaign to refurbish, expand and relocate stores, '94 may be the year Kmart's apparel debuts on industry watchers' best dressed lists. Research compiled by Leo J. Shapiro and Associates indicates that Kmart shoppers spent more of their disposable income in new and recently remodeled stores. And the total amount spent on clothes was higher in renewed stores.

Specifically, the study indicates that a mean amount of $317 per household was spent in remodeled stores. In units that had a major remodel, the mean amount spent hit $333.

The survey also found that slightly more than half of the total amount spent per household was used to purchase men's, women's and children's clothing. Among all stores that were remodeled, a mean figure of $161 was spent on clothing for the family. Compare that to a mean amount of $145 spent chainwide and to $174 per household spent by shoppers who frequent units with major remodels, and the impact of better presentation, improved lighting and signage become apparent.

Another survey, by Kmart researches last spring, lends more credence to the theory that shoppers are more attracted to updated stores and spend more there.

The Kmart study found that of those polled, 30% said they'd shop for children's clothing in a remodeled stores vs. 15% who said they would shop for kids' togs in a non-renewed unit.

In men's and women's apparel, the figures also favor remodels. Nearly one in five consumers said that they would shop Kmart for men's casual clothers in an updated store; only 9% said they'd shop that area in the chain's older stores. In women's casual clothes and women's underwear, 17% of those polled said they would shop for apparel in a remodeled store vs. 10% who said they'd shop that department in a non-renewed unit.

"We created a professional fashion department, staffed it with top designers and invested in the latest computer design enhancements to make sure that Kmart's fashions are on trend," said a Kmart spokesperson. "We've narrowed the focus on the number of private lines in apparel and added more brand names to the merchandise assortment."

Suppliers and industry insiders suggest that the most critical step taken by Kmart to bolster it's apparel business was its re-commitment to quality assurance. In the past, Kmart's quality control was largely reactive -- usually resulting from consumer complaints or a glut of returns.

Today, Kmart's testing laboratories, modeled after JCPenney and Land's End, are proactive. According to Sal Incalcatera, director of Kmart's quality assurance program, almost all textiles and apparel are tested months before hitting the selling floor. Depending on the product, as many as 30 tests are performed by Kmart technicians.

"The purpose of the program is to build sales through repear customers," said Incalcatera. "We believe that if the quality meets or exceeds the customers, standards, they'll become repeat customers. Cultivating that loyalty will enable us to increase sales."

Kmart's commitment to quality assurance extends beyond U.S. borders. Merchandise Testing Labs, a Brockton, Mass.-based firm, oversees five labs in the Far East while Enfield, Conn.-based Springborn Laboratories conducts tests according to Kmart standards in a facility in Horn, Switzerland.