Kmart and The WB Television Network Announce Exclusive Marketing Agreement

Kmart Holding Corporation (NASDAQ: KMRT) ("Kmart") and The WB Television Network ("The WB") today announced an exclusive integrated marketing campaign to launch five new Kmart Back-To-School fall apparel collections and The WB's new season of shows. This marketing partnership is the first of its kind where a major retail brand is working with a television network to jointly leverage their respective assets for cross promotional purposes.

As part of the partnership, more than a dozen celebrities from returning hit shows "7th Heaven," "One Tree Hill" and "Reba," and new shows "Summerland" (set to debut Tuesday, June 1) and "Blue Collar TV" (set to debut in August), will wear Kmart's exclusive new fall apparel in the retailer's Back-To-School TV advertising and marketing campaign. In addition, The WB's stars will wear Kmart apparel in multiple episodes of the participating shows.

Paul Guyardo, Senior Vice President, Chief Marketing Officer of Kmart, said, "We're thrilled to be working with The WB and their bright young stars. They've truly helped us bring to life the quality and style of our all-new, exclusive back-to-school collections. The WB is a fantastic marketing partner and we look forward to seeing this campaign come to life."

Kmart will reach across major media outlets in a comprehensive mix of television, print, newspaper, online, outdoor, contests, spot radio buys, and in-store promotions featuring The WB talent. Outdoor ads will include billboards in Times Square and on the Sunset Strip. The marketing plan also includes a walk-on role for one lucky Kmart customer, product placements and on-air call outs leading into commercial breaks. Stars of The WB will also make personal appearances at select Kmart stores in New York and Los Angeles. The campaign is expected to begin on or about July 25, 2004 and last through September 16, 2004.

In return, Kmart will drive its customers to tune-in to The WB's fall lineup by providing tremendous cross promotional support. The WB's talent and new fall shows will be called out in every element of the marketing campaign. In addition, The WB will receive significant exposure in Kmart's approximately 1500 stores nationwide through in-store radio, extensive point-of-sale, and "sizzle" reels airing The WB's programming highlights. Over the promotional period, the in-store support will expose The WB's celebrities and shows to more than two million Kmart shoppers per day, who will carry out nearly 200 million shopping bags with The WB's logo displayed.

Said The WB's Co-President of Marketing, Bob Bibb, "It's no secret that launching a network's television season gets harder every year. At the same time, we are always looking for brand extensions that help our loyal advertisers, like Kmart, and add value to our marketing goals. This promotion is the best of all worlds."

All creative for the campaign is being developed by Grey Worldwide (NASDAQ: GREY), Kmart's agency-of-record. The print portion of the campaign will be shot by renowned fashion and celebrity photographer Peggy Sirota. 30- second television commercials will be shot by director Dewey Nicks, well known for high-fashion branding campaigns.

Said The WB's, Co-President of Marketing, Lew Goldstein, "The WB brand is something we guard very carefully, so first and foremost, we were knocked out by the new creative vision that Paul and his group at Kmart presented us. Peggy Sirota is a world-class photographer, so we knew our actors would be presented in a stylish and artistic manner, which they are. That, coupled with the massive scope of Kmart's print, outdoor and television buy and their willingness to make this a collaborative process, sealed the deal for us. We couldn't be happier."

In addition, Kmart and The WB network will jointly sponsor a "Look the Part, Get the Part" contest in all Kmart stores nationwide. Contestants will have the opportunity to submit photos of themselves wearing apparel from the same Kmart proprietary brands featured in the campaign and could win a trip to Hollywood for a walk-on role on The WB this fall.

Five of Kmart's exclusive apparel collections, designed and developed in-house by Lisa Schultz, Chief Creative Officer and John Goodman, Chief Apparel Officer, have been carefully matched to appropriate WB shows:

- Thalia - Fashion forward, trendy and stylish women's apparel - will be featured with stars of "One Tree Hill."

- Route 66 - Men's and women's casual wear and denim fashions - will be featured with stars of "7th Heaven" and "Reba."

- Joe Boxer - Exclusive line of intimate apparel, home accessories and outdoor entertaining accessories - will be featured with stars of "Blue Collar TV."

- Athletech - Men's and women's sport and athletic apparel - will be featured with stars of "Summerland."

- Gear 7 - Men's urban and hip hop-inspired apparel - will be featured with stars of "One Tree Hill."

Guyardo concluded, "Kmart's partnership with The WB network is consistent with our philosophy of developing robust relationships with the country's leading brands. Our program with The WB is the first of many unique advertising and in-store promotions that will showcase our exclusive brands and drive profitable sales. At the same time, our contest will offer one fortunate Kmart customer the opportunity of a lifetime."

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. Kmart operates more than 1,500 stores in 49 states. For more information visit the Company's website at www.kmart.com .

The WB Television Network

The WB Television Network is a targeted network that appeals to young adults and teens and has been a leader in quality scripted programming for almost a decade now. It reaches 92% of the United States on over 200 affiliates. The WB Network is a Warner Bros. Entertainment Company, a division of Time Warner.

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; The WB Television Network

CONTACT: Elliot Sloane, +1-212-446-1869, esloane@sloanepr.com , or Anton
Nicholas, +1-212-446-1889, anicholas@sloanepr.com , both for Kmart; or
Brad Turell of The WB Network, +1-818-977-3627, Brad.turell@thewb.com

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