Apparel success spawns ambitions to dress America - Special Section - The K mart Story

Discount Store News, Dec 8, 1986

Apparel Success Spawns Ambitions to Dress America

TROY, Mich. -- K mart has set its sights on dressing America--or at least the majority of Americans.

That's because its clothing sales reportedly have taken off, sending more money flowing right to its bottom line. The chain wants to live up to its new found potential in the area.

All year, the chain has been pointing to strong apparel sales as helping to pump up profits by 57.6% in the first half and by 12.7% in the third quarter.

Clothing, excluding shoes, was reported to account for 22% of sales last year and is swiftly approaching the chain's often-cited goal of 30% by the end of 1989.

The future force in apparel will come, in part, from expansion of in-store sections in all new stores and remodels from about 24% of the selling floor up to 28% to 30%. With that additional space, the chain will nurture some add-on business.

'We're zeroing in on certain areas that will need more space: full-figure, petites, big and tall in the men's departments, maternity wear in selected stores and kids departments," said Joseph Antonini, president of K mart Corp.

It's a strategy for building the apparel customer base. And it's the same basic strategy that Antonini, as K mart apparel president, spearheaded in 1983. Back then, those who believed in the potential of apparel, however, were in the minority at K mart.

"The changes that I've made since 1983 in the apparel division is that everything then was cheap. Our big short buy was $3.96. Now we have $3.6, $5.96, $9.96 and $12.96," Antonini said.

"We've changed our breadth of assortment and now we cater to a broader range within the same group and we're hitting more customers," he added.

Today, K mart expects to draw its shoppers from households with incomes of $15,000 to $50,000. Some 55% of the nation's households fall into that income bracket, and together they account for 60% of the spending power, Antonini said.

The chain's bevy of private labels are designed to reflect the basic fashion tastes of those masses. Private labels account for 30% of the chain's apparel volume. Even the year-old Jaclyn Smith collections turned out to have a surprisingly wide appeal.

"I thought perhaps in the beginning that with Jaclyn Smith we would reach that [$40,000 to $50,000 income] customer only. But that wasn't the case. Every price group and every income level is buying that product, and that's why we had to expand it," Antonini said.

What's happened over the past few years, he explained, is that, as the chain altered its direction in apparel, people who were already shopping K mart shed their prejudice and started to buy apparel. Last year, sales of apparel, shoes and hosiery at the discounter hit $6 billion and continues to gain, reported Glenn Smith, president and chief executive officer of K mart apparel.

These revelations, not to mention spiraling sales trends, have spawned a new attitude at K mart. Every aspect of the apparel business from the personnel organization to in-store presentation and merchandise programs has been improved.

Now, K mart apparel merchandisers stationed in Troy, North Bergen, N. J. and California all consider themselves industry leaders, instead of followers. Being a season behind department stores is no longer acceptable.

These developments reflect that new attitude:

* Ron Buch was this year named to the new position of vice president of product development and already has led a trip to Europe to scout out new fashions that will be taking hold in the U.S. In his previous job as vp, general merchandise manager of men's and boys' wear, he helped pursue a program with Campus Sportswear that will push the discounter into the men's coordinate and big and tall size businesses.

* Smith, president of K mart apparel, reported that the chain decided to tap into the Made in the U. S. A./Crafted with Pride campaign, so it contacted the spokespersons, Carol Channing, Sammy Davis Jr. and Bob Hope, and put together its own hangtag and signing campaign that went into the stores last fall.

* Debra Grafton, vp, gmm of ladies' and girls' wear, worked to develop a youth-oriented line of full-figure sportswear as a joint venture with Jordache. As well as strengthening its full-figure program, the division is setting up departments for petites--estimated at 39% of the female population.

* Robert Moore, divisional merchandise manager of boys' wear and infants and toddlers, said his buyers have been directed to put together bold new approaches for their categories. Infants and toddlers private label programs are being overhauled.

On the in-store refurbishment front, a total of 800 stores were scheduled to be reset with the latest decor by the end of this year. All stores opened or remodeled in the fourth quarter have added space that previously was used for auto service bays or building materials sections. In a recently opened, full-size store in Wall Township, N. J., that added space accounted for 4,000 sq. ft. At least 800 of the chain's stores will get the same increase in apparel.