Kmart

Historical Overview

In 1987 Sebastian S. Kresge, the founder of Kmart opened his first five-and-dime store. In 1962 Kresge had opened the first Kmart discount department, followed by 17 other Kmart stores that same year. (4)

In 1966, Kresge died, leaving 735 Kresge variety stores and 162 Kmart stores with combined annual sales greater than $1 billion. Management replaced all Kresge stores with Kmarts and continued to build more Kmarts. (4)

In 1977 Kmart Corporation was established with 95% of sales coming from Kmart department stores. In 1981, the 2,000th Kmart was opened.(4) (For other significant historical facts see Appendix 1.)

Kmart Corporation began diversifying their business strategy in the early 1980's by acquiring many different companies. (For a complete listing of Kmarts History of Diversification see Appendix 2.)

Beginning with Antonini's stay as CEO, president, & Chairman of the Board and continuing into this year, Kmart has been divesting these businesses. This divestiture strategy has left Kmart with only % shares of the shoe store that currently stocks their shoes (Kmart does not own the shoes it sells). Kmart after several years of negative income have chosen to concentrate on their core business.

Currently Kmart is undergoing a reconstruction strategy. This strategy includes constructing Super Kmarts to compete with Wal-mart's Super-Centers and grocery stores. Super Kmarts are open 24 hours. For their current stores, they are closing down the smaller ones and remodeling the larger ones into Big Kmarts. The Big Kmart is designed with a "pantry", which is like a convenient store set-up, near the registers. The "pantry" is the central point with other items radiating out in terms of frequency of purchase. Kmart is opening Big Kmarts at the rate of 600 stores per year. Big Kmarts will