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Kmart’s home makeover: Jaclyn Smith tapped to revitalize a business once dominated by Martha Stewart

9/8/2008

Hoffman Estates, Ill. —Kmart is simultaneously revitalizing its Jaclyn Smith brand and repositioning a key destination department as it rolls out not one, but two major labels in its home department.

As Martha Stewart Everyday’s time runs out, Kmart is introducing Jaclyn Smith bed and bath fashions, even as it rolls out the Cannon brand in home departments throughout the chain.

Doug Wurl, vp and gmm for home fashions at Sears Holdings said the Jaclyn Smith collection play at Kmart is positioned for the style-conscious value customer.

“In these difficult economic times, it is important for consumers to have confidence in trusted brand names,” he told Retailing Today.

“Jaclyn Smith has been a successful apparel line for 20 years,” continued Wurl. “We are pleased to offer our consumers the Jaclyn Smith Home Collection, which will embody a fresh, simple, modern look, while maintaining the timeless beauty and quality that have long been trademarks of the apparel lines. The Jaclyn Smith Home Collection allows us to trade more broadly than our current brands on the floor in terms of styles and sensibilities. Our products in this line are positioned to deliver better values to our consumers by delivering outstanding design and construction at compelling prices,” he concluded.

So, it seems that Kmart is going for the kind of transitional styling that has become increasingly popular in the mass market. The more modern Jaclyn Smith line should work effectively with Cannon, Wurl said. “The historic Cannon brand is one of the most trusted home textile brands in the United States. We feel that our customer deserves the highest quality and best prices in balance with traditional designs and construction.

“Cannon will offer our value consumer great options on all of the basic home textile products he or she traditionally has shopped at Kmart for in the past,” continued Wurl. “This brand complements Jaclyn Smith in terms of lifestyle balance with an emphasis on traditional and country at very compelling prices,” he said.

The Cannon and Jaclyn Smith introductions should help Kmart satisfy shoppers’ desires to remain up to date in home fashion, while still providing a sense of comfort, Wurl said. “The key design trends in home for this fall reflect modern, clean lines grounded in earth-tone colors with subtle bright accents that help lift stripes, plaids and florals to the surface,” he noted. “Nature plays an important role in defining scenic woodland stories that are conveyed across the entire home. These stories will travel from fall and build into the holiday season.”

The difficult economic times make it particularly important for Kmart to strengthen its ties with customers. “Consumers are reluctant to sacrifice quality, even when experiencing a moderate level of economic anxiety,” Wurl said. “We strive to be a value destination for our consumers in home products. We believe our new assortments will resonate because they are products and designs that are focused on fulfilling a desire to give the family high quality products that are designed well and built to last. We think the Cannon and Jaclyn Smith products offer best-in-class quality at great prices.”

Wurl said the introduction of Cannon and Jaclyn Smith Home will demonstrate Kmart’s responsiveness to its customers’ long-term, as well as immediate, concerns. “Extensive research has shown that our customers place a high priority on trend-right products that represent value for the price, including quality and a variety of brands that are trusted,” he said. “We are very excited to add Jaclyn Smith and Cannon to our current stable of brands in order to improve our customer’s perception of Kmart.”

The focus at Kmart, said Wurl, is on providing customers with “trend-right solutions” by putting “product quality first and by delivering value. We do this by leveraging our capabilities and offering great designs and solutions for the home across multiple categories,” he said. “This focus ensures our commitment to delivering trusted brands that the American consumer desires.”

Kmart adding the Jaclyn Smith Home Collection comes as parent Sears Holdings provides indication that it will increasingly focus on core proprietary brands as it tries to turn around the business.

Last month, Sears Holdings announced that it had appointed Guenther Trieb to senior vp and president of Kenmore, Craftsman and DieHard. His job, said the company, is to oversee and grow the value of the company’s major brands. Trieb joined Sears Holdings after a 24-year career with Procter & Gamble.

Kmart is looking to revitalize its 20-year relationship with Jaclyn Smith. In its heyday, the Jaclyn Smith brand was one of the most recognized in retailing, with a level of recognition comparable to Sears Holdings brands such as Kenmore, Craftsman and Martha Stewart Everyday. With Martha set to jump ship and set sail with Sears Holdings’ rivals, including Wal-Mart and Macy’s, developing a replacement customer proposition is critical.

MSE was an important destination brand for Kmart. The Jaclyn Smith brand slipped as the actor/designer became less visible in the 1990s. But she’s back with a reality show and Kmart is ready to build the brand again, this time in conjunction with its rollout of Cannon as a proprietary brand in its channel.

Or virtually proprietary. Meijer also has carried the brand. Kmart stated that the Jaclyn Smith home line will build on three of her signatures: “impeccable taste, unquestionable standards and a reputation for uncompromising attention to detail.”

Brands my be the best raft Sears has to keep it afloat in difficult times and it must make progress in improving their attractiveness. Sears has recently tried to boost its image among tweens and teens with its Arrive Lounge promotion, which was heavily invested with alternative media advertising, but it still has work to do if it’s going to build a winning position in the market.

In the last quarter, Sears financials leaked negative numbers, but the retailer held its own in some ways, beating analyst estimates for earnings per share. Sears Holdings reported net income of $65 million, or 50 cents per diluted share, for the second quarter of 2008, compared with net income of $173 million, or $1.15 per diluted share, for the second quarter of 2007. Latest quarter results included the impact from the reversal of a $62 million—$37 million after tax, or 29 cents per diluted share—reserve due to the overturning of an adverse jury verdict relating to bond redemption. Net income was $65 million, including the reversal impact, versus $173 million in the year-earlier period. Revenues were $11.76 billion in the 2008 second quarter, versus $12.26 billion in last year’s period. Sears comparable-store sales in the United States slid by 6.7% as Kmart’s comps declined by 5.6%. Overall, domestic comps declined by 6.2%.

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