Kmart Launches the Kmart Rewards Credit Card

Kmart Holding Corporation today announced the launch of the Kmart Rewards credit card. The new credit card program is being managed by HSBC - North America's retail services business.

The card offers $10 off the first card purchase of $50 or more and a $10 reward for every $250 in account purchases thereafter. Customers will also be offered 90 days, same-as-cash financing on any purchase over $100 during the 2004 holiday season.

"The Kmart Rewards credit card is an important tool in our efforts to retain and better serve our existing customers," said Paul Guyardo, chief marketing officer for Kmart. "The Rewards card will provide valuable benefits and increased spending power both in our stores and online, just in time for the holiday season."

Kmart will also develop numerous promotional offers for its cardholders tailored to their individual customer purchasing habits, providing additional benefits to membership. A more sophisticated approach to direct marketing will result from this intelligence and create a greater sense of loyalty among existing Kmart customers.

"Like Kmart, we understand the needs and expectations of today's consumers," said Richard Klesse, managing director of business development and client relations for HSBC's retail services business. "Our customized private label financing program will help Kmart deliver world-class service to their customers and build brand loyalty through the benefits of this new card."

The card, which has no annual fee, offers free online access and will be marketed through in-store promotion, print and online advertising beginning the week of November 8. Customers may also apply by phone at 1-866-Kmart4u or online at http://www.kmart.com/ .

About Kmart Holding Corporation

Kmart Holding Corporation (NASDAQ: KMRT) and its subsidiaries (together, "Kmart") is a mass merchandising company that offers customers quality products through a portfolio of exclusive brands that include Thalia Sodi, Jaclyn Smith, Joe Boxer, Kathy Ireland, Martha Stewart Everyday, Route 66 and Sesame Street. For more information visit the Company's website at http://www.kmart.com/ .

About HSBC Retail Services

HSBC Retail Services is a leading issuer of private label (merchant branded) credit cards in the United States. This business provides flexible, customized credit card solutions for the world's premier retailers and manufacturers and has over 60 active merchant relationships, including Best Buy, Levitz Furniture and Saks Fifth Avenue.

About HSBC - North America

HSBC - North America includes all of HSBC's U.S. and Canadian businesses, including the former Household businesses, and has assets approaching $300 billion. The company's businesses serve more than 60 million customers in five key areas: personal financial services, consumer finance, commercial banking, private banking and corporate investment banking and markets. Financial products and services are offered under the HSBC, HFC and Beneficial brands. For more information, visit: http://www.hsbcnorthamerica.com/ .

Cautionary Statement Regarding Forward-Looking Information and Other Matters

Statements or reports made by or on behalf of Kmart which address activities, events or developments that we expect or anticipate may occur in the future are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect, when made, Kmart's current views with respect to current events and financial performance. Such forward-looking statements are based upon assumptions concerning future conditions that may ultimately prove to be inaccurate and involve risks, uncertainties and factors that could cause actual results to differ materially from any anticipated future results, express or implied, by such forward- looking statements. Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, factors relating to Kmart's internal operations and the external environment in which it operates; Kmart's ability to successfully implement business strategies and otherwise fund and execute planned changes in various aspects of the business; marketplace demand for the products of Kmart's key brand partners, as well as the engagement of appropriate new brand partners; changes in consumer spending and Kmart's ability to anticipate buying patterns and implement appropriate inventory strategies; Kmart's ability to reverse its negative same-store sales trend; competitive pressures and other third party actions, including pressures from pricing and other promotional activities of competitors, as well as new competitive store openings; the resolution of allowed claims for which Kmart is obligated to pay cash under the Plan of Reorganization; Kmart's ability to properly monitor its inventory needs in order to timely acquire desired goods in appropriate quantities and/or fulfill labor needs at planned costs; Kmart's ability to attract and retain customers; Kmart's ability to maintain normal terms with vendors and service providers; Kmart's ability to maintain contracts, including leases, that are critical to its operations; Kmart's ability to develop a market niche; regulatory and legal developments; general economic conditions; weather conditions, including those which affect buying patterns of Kmart's customers; other factors affecting business beyond Kmart's control; Kmart's ability to attract, motivate and/or retain key executives and associates; and other risks detailed in Kmart's Securities and Exchange Commission filings. Kmart undertakes no obligation to release publicly the results of any revisions to these forward-looking statements to reflect events or circumstances after the date such statements were made.

SOURCE: Kmart Holding Corporation

CONTACT: Kmart Media Relations, +1-248-463-1021; or Kathleen Morrison of
HSBC - North America, +1-847-564-6111, kathleen.a.morrison@us.hsbc.com

Web site: http://www.hsbcnorthamerica.com/
http://www.kmart.com/