During a meeting today with the financial community in New York, Kmart Corporation (NYSE: KM) Chairman and Chief Executive Officer Chuck Conaway outlined strategic initiatives now underway at the company and the immediate priorities that Kmart is addressing to significantly improve its financial performance and competitive position.
In his remarks, Mr. Conaway said, "We believe that Kmart will become a wholly new company ready to truly exploit new growth strategies unprecedented in the company's history. Yes, there's a lot of work to do and there will be no silver bullet, but it's the opportunity of a lifetime to get it done. That's why I came here and I'm more excited than ever about our many opportunities."
Mr. Conaway detailed Kmart's three overarching strategic imperatives, which are intended to guide rapid and measurable improvement at the company:
* Dramatically improve retail execution to achieve world class execution, making effective end-to-end improvements and investments in Kmart's supply chain;
* Create a customer-centric culture to ensure that the day-to-day activities in every Kmart department are inherently linked to better satisfying and serving Kmart customers;
* Become a marketing- and sales-driven organization with a defined and differentiated market position. This includes ensuring that the company has the discipline and agility to test and leverage its strengths to create a long-term, dominant marketing position.
Mr. Conaway noted that Kmart has already completed a comprehensive review of the company's asset productivity, creating many opportunities within the organization and encouraging a "Play to Win" mentality that initiates cultural change company-wide.
Mr. Conaway pointed out that Kmart has already taken decisive steps toward achieving its strategic goals. For example, Kmart will invest nearly $2 billion in infrastructure between now and August 2002. "These steps are designed to dramatically revamp our technology processes, change management capabilities and systems over the next 24 months. We've reallocated our capital for the third and fourth quarters of 2000 and committed to these priorities in 2001 and 2002 so that we can leap-frog ahead on these investments."
By October 2000, all Kmart stores will have updated scanners with 1,600 of the stores receiving the most state-of-the-art scanners available. New point- of-sale registers also will be installed in every Kmart store by August 2001. With the new scanners and registers in place, Mr. Conaway said the company's goal is to increase the speed of customer check-out by at least 20 percent.
To further enhance customer service, beginning in October, the company will launch a comprehensive customer service measurement system that uses a voice response system that will provide direct feedback from 15 to 20 million real customers every year. Additionally, a new Customer Service Center will begin operation in October that will be available 24-hours a day, 7 days a week to assist and resolve customer concerns with immediacy. The company also will reduce the span of control for its district managers, from about 13 stores to 8 stores each, to ensure greater accountability for store performance and improvement.
Mr. Conaway told the investors and analysts at the meeting, "We know that our time-frame is short in that the turn-around we must achieve in fixing the fundamentals of the business, establishing a new emotional bond with our customers and preparing for growth must be achieved during the next 24 months. You have my commitment to open, candid communication of how we're doing and the tough choices we will make to win for the future."
Kmart Corporation serves America with 2,165 Kmart, Big Kmart and Super Kmart retail outlets. In addition to serving all 50 states, Kmart operations extend to Puerto Rico, Guam and the U.S. Virgin Islands. More information about Kmart is available on the World Wide Web at http://www.bluelight.com/ in the "About Kmart" section.
Cautionary Statement Regarding Forward-Looking Information
Statements other than those based on historical facts, which address activities, events, or developments that the company expects or anticipates may occur in the future are forward-looking statements which are based upon a number of assumptions concerning future conditions that may ultimately prove to be inaccurate. Actual events and results may materially differ from anticipated results described in any forward-looking statements. The company's ability to achieve such results is subject to certain risks and uncertainties, including, but not limited to, economic and weather conditions which affect buying patterns of the company's customers, changes in consumer spending and the company's ability to anticipate buying patterns and implement appropriate inventory strategies, continued availability of capital and financing, competitive factors, and other factors affecting business beyond the company's control. Consequently, all of the forward-looking statements are qualified by the cautionary statements and there can be no assurance that the results or developments anticipated by the company will be realized or that they will have the expected effects on the company or its business operations.
SOURCE: Kmart Corporation
Contact: Mary Lorencz of Kmart Media Relations, 248-643-1021