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KMART GETS HIP RETAILER SWINGS DEAL WITH THE WB.

Byline: Brent Hopkins Staff Writer

It's hip, it's edgy, it's young, it's ... Kmart?

The venerable retailer, only a year back from a Chapter 11 bankruptcy that cost it hundreds of stores and tens of thousands of jobs, wants younger shoppers as it struggles to regain market share.

The Troy, Mich.-based chain had floundered for years as it lost its image, consigned to being the default shopping site for the discount hungry. On Thursday, it tried something radically different, announcing an advertising deal that will link it with Burbank-based network The WB.

The network's stars will hawk Kmart's private-label brands in a summer ad campaign and wear them on several shows, including ``7th Heaven,'' ``One Tree Hill'' and ``Blue Collar TV.'' Retail experts said if the deal, which will cost the chain around $30 million, works, Kmart will draw the attention of younger shoppers, while The WB gets its shows advertised on television, billboards, radio and in theaters.

A network that prides itself on being cool partnering with a store with a decidedly square past seems like an odd marriage, even to those involved.

``We spent more time looking at what it could be than what Kmart had been,'' said Suzanne Kolb, executive vice president of marketing for The WB. ``If you'd asked me six months ago, is Kmart the perfect retailer to be in business with? my response would have been very different.''

Even Kmart's newly hired chief marketing officer, Paul Guyardo, conceded the move was a departure from its past strategy of targeting Middle America. Retail experts say it's already made some changes and brought in more Latino consumers with its Thalia line, advertised by Mexican pop star Thalia Sodi. Guyardo's mission, launched when he joined the company eight weeks ago from the Home Shopping Network, is to push the brand even further into new territory.

``This is something you'd never expect from Kmart,'' he said. ``We've improved quality, we've dialed up the style, but we're still offering it at a good price.''

The campaign, designed by ad agency Grey Worldwide, will kick off July 25 and run until Sept. 16. Kmart's Thalia, Route 66 and Joe Boxer lines will get the treatment, along with its new lines, sportswear collection Athletech and hip hop-inspired Gear 7.

Kmart, still struggling to regain its footing after emerging from Chapter 11 last May, could certainly use an infusion of cool. The chain announced earlier this week that same-store sales had fallen 12.9 percent in the first quarter, signaling that it needs to do more than close stores to maintain profitability.

``You can't just cut costs to turn around,'' said George Whalin, president and chief executive officer of Retail Management Consultants. ``You've got to take some big chances, do some really out there things and take risks. Maybe this could be it for them.''

Though the Joe Boxer line has remained strong and Disney Kids and Sesame Street brands still have cachet, the store needs to shore up its other proprietary lines. The collections, which offer higher margins and face no direct competition at other stores, have been bolstered by moving all design work back in-house and shying away from the polyester prints that made them previously unfashionable. Experts suggest that if the clothes promoted in The WB deal can catch on, they'll take the pressure off the Martha Stewart Everyday and soon-to-be revived Jaclyn Smith lines.

``It's an odd fit, but one that could easily make Kmart recognizable among the younger set,'' said Kurt Barnard, president of Retail Forecasting. ``The retailer may be flagging and isn't a tower of strength, but they still have some very good names. They're very much in business and they have a lot of stores. There's a very good chance that they'll gain speed again.''

Brent Hopkins, (818) 713-3738

brent.hopkins(at)dailynews.com

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(1 -- 2 -- color) Stars of The WB shows ``7th Heaven,'' below, and ``One Tree Hill,'' left, will model Kmart's private-label brands in a summer ad campaign.
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Title Annotation:Business
Publication:Daily News (Los Angeles, CA)
Date:May 21, 2004
Words:670
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