Kmart Co
...founded in 1899 in Detroit by Sebastian S. Krege. The original 5 & 10 variety store operation
low gross margins
high turnover
concentration on return-on-investment
1957 new strategy forced by development of supermarkets and expansion of drug stores into general merchandise lines, which ate into the variety' store.
Harry B. Cunningham moved from operational responsibilities, groomed for presidency assignment was to study existing retailing businesses and recommend marketing changes. Board of directors accepted Cunningham's recommendation of discount stores. Cunningham became president birth of Kmart. The firm made an $80 million commitment in leases and merchandise for 33 stores before the first Kmart opened in 1962 in garden City, Michigan. As part of this strategy, management decided to rely on the strengths and abilities of its own people to make decisions rather than employing outside experts for advice.
In 1987, the 25th anniversary year of opening of the first Kmart store in America, sales and earnings of Kmart Corporation were at an all time high. The company was the world's largest discount retailer with sales of $25,627 million and operated 3,934 general merchandise and specialty stores.
In terms of sales volumes it was the third largest retailer in the US in 1999. Kmart is falling further behind in terms of sales revenue, assets, net income, net worth and market share compared to Wal-Mart it biggest competitor. Where Wal-mart has shown steady growth in all areas, Kmart has had some bad years and some even worse, Kmart is in a state where it is hoping to stave of bankruptcy.
Kmart is operating in a mature industry in which discount retailers have reached the peak of S curve. The various renewal strategies such as: diversification, joint venture and acquisitions have not worked for Kmart.
The position of Kmart is further...
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