Kmart stocks up on talent; 9 posts filled

Discount Store News, March 4, 1996 by Laura Liebeck

TROY, MICH. -- There's a brain drain at Sears and Dayton Hudson -- and Kmart is controlling the tap.

In recent months, Kmart has been wooing top executives from these two retail chains, as well as from other industries, in an effort to secure the best and brightest talent to lift its prospects for the future. Kmart is working especially hard to secure top talent in the areas of human resources and operations for both headquarters and field positions as it looks for a way to redefine the chain in the minds of consumers, vendors and Wall Street.

In addition, it recently initiated a customer service program borrowed from Sears, a star performer in retail circles since turning itself around from the brink of extinction several years ago.

Further, Kmart chairman, ceo and president Floyd Hall last month wrote a letter to 2,600 vendors outlining Kmart's progress and commitment to its business and to its partners. In the letter he also outlined the chain's progress and identified goals.

"The difficulties of 1995 are predominantly behind us and we believe the operating results of the past 12 months represent the bottoming out of Kmart's financial performance," Hall said in the first paragraph of the two-page letter dated Feb. 9. (Kmart's year-end sales and earnings results, plus fourth quarter 1995 results, will be released March 7.)

"Kmart management and associates are working hard to bring about fundamental change and create a foundation for improvement," he added. Hall specifically noted Kmart's change in approach to its business, becoming the retailer of choice for customers by improving merchandise selection, in-stock position, store ambiance and customer service.

He ended the letter by saying that Kmart is "determined to build long-term partnerships with strong, well-capitalized, confident suppliers on terms consistent with past practices and industry standards . . . Be assured that we would regret seeing financial anxiety impact a business relationship, but we will go on with partners who are confident in Kmart and financially capable of assuring us the flow of goods that are critical to our ongoing business plans."

Working to secure that position at Kmart are a host of new executives led by former Sears de Mexico president Warren Flick, now executive vice president and president of U.S. Kmart Stores.

Kmart recently announced that Warren Cooper, a 22year Sears veteran, has been named executive vp of human resources and administration. He reports directly to Hall. Other recent hires include Edward Hearne, divisional vp, merchandising, and Joseph Collins, senior vp of logistics, who spent four years at the Chicago-based retailer from 1968 to 1972. Immediately prior to joining Kmart, Collins was vp of consumer products for Gemini Consulting/Retail, Chicago.

Hearne most recently hails from Lechmere, but prior to that was with Sears. His last Sears post was as divisional vp and general manager, home electronics and office.

From Dayton Hudson, Kmart hired Larry Carlson as vp, real estate market strategy. He was a 21-year veteran with the Minneapolis-based retailer. Also new are Donald Norman, divisional vp, business process re-engineering, merchandise and inventory controls, and Gilbert Wachsman, both from Target. Wachsman joined Kmart as senior vp and general merchandise manager for hard lines and is now senior vp and general merchandise manager for consumables and commodities.

Another recent appointment was James Churilla, vp real estate finance, a newly created position. Churilla, a 25-year Kmart veteran, had been the company's treasurer. Also, Dennis Charles, a 28-year Kmart veteran, was named to the newly created position of divisional vp, merchandising, horticulture.

New to Kmart is Michael Viola, who was named vp, treasurer, replacing Churilla. He previously served as vp, treasurer and controller with Federal-Mogul.

Cooper, the newest executive to join Kmart, is credited with redesigning Sears' compensation programs, restructuring the retailer's benefit plans and with reducing overall administrative costs.

During his time at Sears, Cooper also increased the number of women and minorities in management, developed innovative educational programs to support the retailer's business. implemented work and family programs and inaugurated strategic human resource planning across all divisions.

Starting Feb. 29, Kmart instituted a Sears-like program, one common in the department store industry: staffing departments with specialized sales personnel to offer knowledgeable sales help to customers instead of rotating associates among many departments.

Also at the store level, Kmart recently announced a full management shakeup that is designed to improve customer service and reduce the cost of operation. Last month, Kmart decided to shift many assistant store managers from salary to hourly pay and to assign managers to every major department in the store.

Kmart tested this streamlined store management program in 40 markets for about four months.