After Antonini: Kmart the supermarket? - Joseph E. Antonini - Food Merchandising - Editorial

Discount Store News, May 1, 1995 by Don Longo

Under the leadership of former chairman, president and ceo Joe Antonini, Kmart spent much of the past 10 years trying to improve its fashion image. Antonini came to the chairmanship via the apparel division. One of his lasting achievements at Kmart was bringing in Jaclyn Smith in 1985 to endorse a line of sportswear, and later all types of other fashion apparel and accessories. Apparel sales flourished as Kmart reported record sales and profits in 1992.

However, when the company hit the skids two years ago, Kmart's inability to deliver fashionable apparel at a value was one of the main culprits.

Poor displays, distribution and inventory problems, lack of trendiness in comparison to the ever-expanding upscale discounter Target, and other failures related to poor communication between headquarters and the store resulting in poor execution combined to hamper Antonini's renewal efforts.

Of course, disappointing apparel sales is not the sole reason for Antonini's exit. He failed to deliver on promises he made to shareholders, and in the end, the board of directors was forced to take action. Antonini's resignation was a foregone conclusion when the board brought in ex-jewel chairman, president and ceo Donald Perkins as non-executive chairman.

Now that Antonini is gone, the question is whether the discounter will work twice as hard to develop a profitable apparel business, or will the chain turn in another direction to differentiate itself from Wal-Mart, Target and its regional rivals.

The answer to that question probably will not be forthcoming until a successor to Antonini is named. Ron Floto, the executive vice president who inherited most of Antonini's main duties, is a former supermarket executive. He worked for Perkins at Jewel, the well-praised Chicago-based supermarket/drug company, and at Kash' N Karry, a grocery chain that went into Chapter 11 during Floto's stewardship even though some observers praised many of the merchandising changes he made. Floto is also president of Super Kmart Centers, the chain's newest growth vehicle. Expansion of Super K, however, has been slowed this year since Kmart's core financial troubles began to mount.

One of two newly elected Kmart board members is also a former Jewel executive. Richard Cline, chairman and ceo of Nicor, in Naperville, Ill., ran Jewel's Osco Drugs division in the 70s. At Nicor, Cline was responsible for restructuring the giant natural gas distribution utility. He planned to relinquish his Nicor responsibilities to focus his full attention on Kmart.

The influx of supermarket industry executives does not point to a new fashion direction for the discount department store. Rather, the recent personnel moves suggest that the company feels the main focus of its attention needs to be on distribution, inventory control and getting its internal house in order.

Of course, there is still a possibility that the next Kmart ceo will be an apparel-oriented leader. But with Perkins, Floto and Cline holding key posts, I suspect Kmart's dalliance with food retailing is more than a passing fancy.