Kmart CEO: No Massive Store Closings Planned

Kmart Corp. Chairman and Chief Executive Floyd Hall said Monday that the discount retailer has no plans for massive store closings and is likely to announce the sale of Kmart Canada within the next 30 days.

In his first lengthy comments to the financial community since taking the helm in June, Hall also gave details of how the nation’s second-largest retailer plans to try to lure more shoppers into its stores, including showcasing its consumable goods, improving its service and sprucing up its 2,163 discount stores.

“The big thing is they’re going to have to go out there and do a better job of getting customers into stores and, once they’re there, treat them better,” said Joseph Ronning, an analyst at Brown Bros. Harriman, who attended the meeting.

Though heartened by Hall’s frankness regarding Kmart’s plights, some analysts were disappointed that Hall did not disclose more cohesive longer-term improvement plans.

“Hall’s candid assessment was refreshing and directly in contrast to the one so consistently offered by his predecessor, Joe Antonini, [but] in our view Hall also conveyed little new information of substance,” NatWest Research analyst Robert Buchanan said in a report.

Hall told analysts in a meeting in New York that the company is testing a new format with bigger food sections called the Pantry to attract more customers to its stores. The Troy, Mich.-based company may convert 400 stores to the redesigned format in 1996 and 1997 if current tests in Indiana and elsewhere are positive, he said.

“To succeed, it is clear that Kmart must focus on the traditional discount operations, develop a more competitive merchandise mix to increase sales productivity and fix its operational problems,” Hall said.

Kmart shares fell 37.5 cents to $9 in New York Stock Exchange trading of 4.3 million shares, nearly double their three-month average daily volume. Earlier, shares had fallen as low as $8.75, their lowest since 1983.