Attention Kmart Shoppers! The Blue Light is Back!

Kmart Corporation (NYSE: KM) today announced the return of its legendary BlueLight Special, a major new marketing initiative designed to create in-store excitement, reward loyal customers and attract new shoppers. Kmart is bringing back the American retail icon both in its stores and online (www.bluelight.com ) as the first of several programs that will fall under the BlueLight™ brand.

"The return of the BlueLight Special signals a critical milestone in the current revitalization of Kmart and reinforces our drive to meet consumers' needs and wants in all aspects of their shopping experience," said Chuck Conaway, chairman and CEO of Kmart. "We are focused on building excitement in the stores by bringing back a retail phenomenon that provides consumers with tremendous value and an opportunity to reconnect with Kmart."

The New BlueLight Special

Newly installed in Kmart stores nationwide, the revamped BlueLight Special is the first of several upcoming BlueLight brand initiatives from Kmart. Conducted daily in all of Kmart's 2,109 stores and online at BlueLight.com, BlueLight Specials will offer unprecedented savings on the brands and products consumers really want from every department. BlueLight Specials will include the best of the best -- everything from microwave ovens and fishing poles to Clorox bleach. Shoppers will never know which products will be BlueLight Specials, creating a sense of excitement and anticipation when the celebrated phrase "Attention Kmart Shoppers" is called out in stores or appears on computer screens online.

In stores, BlueLight Special merchandise will be displayed for a limited time in BlueLight Special Zones. Located near the middle of a store, BlueLight Special Zones will be immediately recognizable with suspended canopies, flashing blue lights and music. Customers will be able to select merchandise in the zone while supplies last. At BlueLight.com, a similar event will take place. BlueLight Specials will be visible with a flashing logo on BlueLight.com's top navigation bar. Kmart stores and the online shopping site will feature different products, encouraging consumers to visit both.

"The BlueLight Special and the phrase, 'Attention Kmart Shoppers,' have become part of American pop culture," said Brent Willis, executive vice president and chief marketing officer for Kmart. "We are taking the heritage of value that the BlueLight Special represents for consumers across the country and re-purposing it for a new market and mindset. While it was originally used to move clearance merchandise, we are now using it to give our customers the products and brands they really want at incredibly low prices."

The History of the BlueLight Special

The original BlueLight Special, the brainchild of former Kmart assistant manager Earl Bartell, was first introduced in 1965. Almost immediately, it was adopted as an American icon synonymous with great values. Kmart ceased using the sales tool in 1991, choosing to focus on other retail and company initiatives.

Despite its 10-year hiatus, the BlueLight Special never lost its appeal with the American public. In fact, 62 percent of those polled recognize "Kmart's BlueLight Special." Of those, 93 percent have a positive view of the BlueLight Special (Campbell Mithun Esty Kmart Study, 2000).

Marketing Support

Kmart will support the launch of the BlueLight Special with the largest marketing push in company history. It includes national broadcast, print, in- store and outdoor campaigns debuting the first and second weeks of April. The BlueLight Special will also be supported with a comprehensive online campaign at BlueLight.com and other Web properties. The New York office of TBWA\Chiat\Day is Kmart's agency of record and developed the BlueLight Special advertising.

The BlueLight Brand

BlueLight will also become a consumer mega brand to drive frequency and loyalty by rewarding Kmart's valued customers. Kmart has been aggressively pursuing world-class execution and a customer-centric culture during the past six months and has seen significant increases in traffic conversion and overall customer satisfaction levels.

The BlueLight brand will be Kmart's foundation for value. It is designed to reward loyal customers for being part of the Kmart shopper family with incredible savings on the best merchandise. Several in-store and online marketing initiatives will fall under Kmart's BlueLight brand, including the BlueLight.com shopping site and today's announced BlueLight Special program. Consumers will instantly recognize BlueLight-branded programs and understand the core attributes they represent.

Kmart Corporation is a near-$40 billion company that serves America with more than 2,100 Kmart and Kmart supercenter retail outlets. Kmart donates $35 million each year to support its hometowns and local non-profit organizations. Additionally, Kmart associates provide their most valuable resource -- time -- everyday in their local communities. In addition to serving all 50 states, Kmart operations extend to the Caribbean Islands and Asia Pacific. More information about Kmart is available on the World Wide Web at http://www.bluelight.com/ under the "About Kmart" section.

SOURCE: Kmart Corporation

Contact: Julie Fracker, jfracker@kmart.com , or Susan Dennis,
sdennis1@kmart.com , of Kmart Corporation, 248-463-1021; Andrea Lim of
BlueLight.com, 415-229-9854, alim@bluelight.com ; Tracey Thiele of Day\Break,
212-601-8023, tthiele@porternovelli.com , for Kmart; or Ryan Fey of
TBWA\Chiat\Day, 212-804-1191, ryan.fey@tbwachiat.com

Website: http://www.bluelight.com/