Antonini talks back - excerpts from an interview between Bill Bonds on 'Bonds Tonight' television program with ex-Kmart Corp. President Joe Antonini - Interview

Discount Store News, April 3, 1995

Excerpts from Joe Antonini's interview with Bill Bonds on "Bonds Tonight," WJBK TV2, Detroit, March 24, 1995:

Q: "What are you feeling?"

Antonini: "I think all of us, ceos, any type of job that we have, we had to perform, and when the results aren't there, it makes it difficult. And I think the results of the last couple years, coupled with some strong pressure from the media, pressure from the shareholders, I think heightened the situation and the situation became, I think, in my opinion, to the point where it made it very difficult for me to do my job. There was pressure from the institutional holders. That puts pressure on myself. That puts pressure on the board, of course. If I were looking back today and perhaps tell where I might have gone wrong during the past two years, it probably was not keeping a real good close communication program with the investors."

Q: "Did the things that you used to get to the top work when you got there?"

Antonini: "Sure, it did. In 1990, we realized that our stores were old. We realized that our pricing was very high, compared to our competition. We knew in four, five years that it would be a very, very competitive environment. Our competition was moving in all around us, across the country."

Q: "If you knew that in '90, you must have known in '86."

Antonini: "Well, in 1986, we didn't have that much competition. In 1990, we realized that the competition was growing so fast that we had to make some real quick decisions over a five- to six-year period. Now, when I took over as chairman in 1988, that's when we started planning our strategy, and we made a decision on what to do in 1990. Obviously, we knew it was going to be tough. We had to spend $3 billion on our stores to fix up. We had to lower prices and it was working. The next three years, our profits and sales were sky high. We set records in profits, our stock price hit record highs. After that the retail environment changed. The prices kept going down. Everybody was looking for the same market share. And that's why we announced last year we had to cut our expenses.

"We had an old base of stores. Target and Wal-Mart were opening new stores next to us. That's the difference. It's a deja vu for us, 15 and 20 years ago when we were opening new stores against our competition. So here we were an old base of 2,400 stores that needed fixing and new competition coming in around us."

Q: "But if you were the new chairman, and you've been with the company for 20 years, shouldn't Joe Antonini have known that?"

Antonini: "Well, we did know it. That's why we made those steps to do what we did. And it did work and is working. Kmart is fine. The new stores are producing 17% more sales than the old stores. They're producing 35% more profit than the old stores. If we hadn't done what we did, Bill, we would have been out of business."

Q: "What do you think your two or three biggest mistakes were, Joe?"

Antonini: "Well, I think we were caught in the middle. The middle of lowering expenses and growing the business, meaning, fixing the business; lowering prices to be competitive. So we had a couple of choices to make. Do we raise prices, or do we quit growing. And you couldn't do either one of those.

Q: "Kmart hired four executive vice presidents since October from outside the company. What does that do to the new ceo who had no say on hiring these four guys?"

Antonini: "I think when they hire the new ceo I think he's going to have to understand that that's his team and he'll have to go from there."

Q: "Do you think that somebody is going to buy Kmart?"

Antonini: "First of all, we don't need a buyer, but when you hear that, you have to fully understand that the three largest retailers in the country, plus the local regional retailers are overlapping. If Target bought Kmart, what will they do with all the stores right next to them? This place is overstored. So you can't buy a company in retailing today this big. We have a strategy in place. We think everything that we're doing is right on track."

Q: "You're still saying `we'."

Antonini: "That's good. Kmart will always be in my blood. The things that Kmart is doing are right on track and now it's a matter of execution and implementing the strategy and going forward."

Q: "Do you think the new boss is going to be from outside?"

Antonini: "I think we have to take a look at the new boss from the inside and outside and make the best choice. If it's from the outside, so be it. It's no sin. And if it's from inside, it's fine. Retail is retailing and the best person, whether it's inside or outside, should be getting the job. No, it's no problem."