75 per share to your 3 months ending July 31, 2002. Second quarter sales for 2002 were $7.5 billion, a 15.6 percent drop during the exact same time period in 2001. In accordance with Yue (Summer slump getsa, 2002), Kmart has not noticed quarterly sales that low due to the fact the very first quarter of 1998. Kmart has not posted a quarterly profit mainly because the fourth quarter of 2000. Most significantly, sales benefits for stores open for at least (the traditional measure of a retailer's performance) were down 13.9 percent in July and 11.9 percent in August 2002.
Kmart has also decided to eliminate its e-commerce division, BlueLight.com. Yue (Kmart to pull outa, 2002) reported that Kmart has elected to divest itself of this entity in order to focus on its stores as well as the core competencies of the company. Operating an ISP isn't a core competency for Kmart. Kmart paid more than $3 million to purchase BlueLight.com and hopes that it's going to at least recoup that cost as soon as the sale in the entity to NetBrands Inc. goes forward.
Kmart will continue to operate www.kmart.com, a internet site that has by no means posted a profit. The sale of BlueLight.com is dependent on an auction scheduled for October 7, 2002 and bankruptcy court approval of Kmart's option on October 30, 2002 (Yue, Kmart to pull outa, 2002).
Kmart has thus far responded to its financial crisis by launching a series of sales and promotions aimed at value-oriented buyers (Degross, 2002). The company's insistence that its turnaround depends on sales and promoting on the Martha Stewart brand seems being inappropriate. Some stock analysts are suggesting that Kmart should close additional stores and divest itself from the financial burdens of wholly-owned company properties (Degross, 2002).
Kmart is apparently relying on new marketing programs, brand-focused differentiation, and almost certainly a new store model to regain shopper loyalty and return this company to its former popularity as a growth-oriented and profitable enterprise. Whether the turnaround succeeds, says Howell (2002), is debatable, given tough competition from Wal-Mart and Target and past failures at Kmart's reinvention.
Regardless of what Kmart does to increase its position in the discounting sector, they must combat the dynamics of competition. Firm Week Online (Target's aima, 2002) has pointed out that #3 discounter Target Business is moving to distance itself from its rivals by stepping up partnerships with designers. By using designers, such as architect Michael Graves, Target is offering its buyers a stable of designer-related goods ranging from makeup and trendy clothes to property furnishings and camping goods.
Kmart's modern day financial situation is much an artifact of an work to match its costs on the super- efficient Wal-Mart stores. Target is differentiating itself form its competitors with regard to product, not price. By acquiring additional particular item to attract shoppers, Target can cost everyday merchandise 3 to Five percentage items greater than either Kmart of Wal-Mart.
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