The Achiever Newsletter
People Power and Bluelight Bankruptcy
You can't pick up a newspaper or magazine today without learning more about the demise of an American icon — K-Mart. More reasons seem to emerge every day — poor holiday sales, loss of liquidity, erosion of supplier confidence, failed marketing initiatives, poor product mix, missing niche, stiff competition, aging stores, declining customer service, national economic recession, bankruptcy, antiquated technology, deteriorating image and higher insurance costs in part due to the Enron collapse. Considering this list of challenges, it's easy to understand why someone might have sympathy for this retail giant and its struggling leadership team — regardless of whether you choose to shop there or not.
However, there are many additional facts to consider. K-Mart has been serving customers since 1899. It all began in the Detroit area as S.S. Kresge and quickly spread across the country. In 1962, K-Mart was added to the mix and this retail giant appeared destined for success and domination. Ironically, this was the same year that Target and Wal-Mart opened their first stores.
While K-Mart's current anguish may elicit sympathy from many, one must consider the fact that each of the above elements leading to that anguish must also be dealt with by each and every one of the other retail giants competing for every customer dollar. Consider the fact that K-Mart has been around for more than 100 years while Wal-Mart and Target are infants at 40 years old.
Bigger than Sears, K-Mart, and JCPenney combined, Wal-Mart is the world's #1 retailer, with more than 4,150 stores worldwide, 1,269,585 employees, and more than 100 million customers a week. It continually appears on Fortune Magazine's Most Admired and Best Companies to Work For lists.
Target's future also looks bright as it continues to grow at a very rapid rate. It currently boasts 1,055 Target Stores in 47 states, 62 SuperTarget stores in 14 states, 14 distribution centers, and 197,000 employees. It also enjoys strong financial support through its affiliation with sister-stores Dayton's, Mervyn's, and Marshall Field's (including previous Hudson's stores).
Doesn't it seem as though K-Mart should be better equipped to weather the storm with over 100 years of experience with customers, product lines, competition, marketing and all of the other ingredients necessary to prosper in today's challenging climate? Why aren't competitors experiencing the same negative results?
Industry analysts are suggesting a number of remedies, all of which would require revisiting the basics. This issue is apparently a real challenge for those in charge at the moment. Suggestions from the experts include: value your customers, value your employees, enhance technology, find a niche, and clean up your stores. Another interesting suggestion is to find a person or personality who is or can become the living embodiment of the brand. Lee Iacocca, Dave Thomas, Sam Walton, and Colonel Sanders certainly did the job for Chrysler, Wendy's, Wal-Mart and Kentucky Fried Chicken! Leaders worldwide from every industry should be watching K-Mart's struggles. There are many lessons to be learned which we can then apply to our own challenges in hopes of avoiding future disaster.
Bluelight bankruptcy is a step, not a solution. To accomplish any of the many suggestions from experts, K-Mart is going to have to commit to peoplein a big way. It's going to take talented, dedicated, loyal people to achieve the success K-Mart needs to avoid extinction. Will K-Mart recognize that fact in time? It's going to be interesting to watch. For the sake of Sebastion S. Kresge's spirit and a long history of K-Mart blue light specials, let's hope it comes back to us rejuvenated by people power!
Publication Date: Winter 2002
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