On My First Trip To KMart In 15 Years

12 May

Late this morning I was asked to do a favor for a family member which to my great surprise involved picking up an item that was mysteriously “only” available at KMart.  This came as a shock, since there are several other big-box stores (Kohl’s, Target, Walmart, etc, etc) in the area, and, well, because its KMart; If it weren’t for the continued (mis)adventures of Eddie Lampert, I would have thought the place went the way of Bradlees long ago.

I was at Willowbrook Mall (a GGP property that seems to be doing much better than just a few short years ago) earlier, so I decided to roll on over to the KMart in Wayne, NJ, a relatively affluent suburb of New York City.  To say my expectations were set low the moment I parked would be a serious understatement.

Generally, I don’t hold it against a store (and/or its customers) when there’s people loitering outside smoking or whatever.  Then again, I don’t usually go shopping at 11am, like I did today.  Don’t get the wrong idea, its not like there were vagrants or bums about, but color me skeptical of a business that caters to people who can hang around in the middle of the day with no apparent place to go.

Moving on…

When I first walked in the store, my first impression was that it seemed dark and drab – of course I had freshly-procured sunglasses on – but even after removing them, my feelings didn’t change at all.  The color scheme is something close to that of a Target, but dated by at least a decade (or two, or three).  Right in front when I walked in, I was accosted by a menagerie of brightly-colored women’s clothing, with “fashion” tanks starting at $4.95.

Two comments here: 1. Anyone who says you can’t find stylish dress on the cheap is full of shit.  Unless you’re a fashion snob/brand whore, you can look more than presentable (if not downright good) for a fraction of the price I’m assuming we and our average readers spend.  2. So-doing may take more effort than at higher-end stores.  I took a quick walk through the racks and found myself cringing more than I was nodding in approval, but then again, my reactions are essentially the same at stores like J. Crew most of the time, so perhaps this is not so unique to KMart as it is to the entire Apparel industry…

While it was early in the day, the thin crowd generally matched the prices, as did the cashiers, who seemed to care less, and take longer than any I’ve encountered in recent memory (especially compared to those at Target).  As I walked around the store – aforementioned drab/murky/dated atmosphere aside – I noticed an incredibly wide array of products, organized in pretty damn unappealing ways.  Absent was the friendly graphics and presentations that seem to be a hallmark of stores like Target.  Seriously, the only way I can describe the place is like Bradlees in the mid 90’s.  Sure there were some flat-screen TV’s but the vibe I got was depressing, to the point I’d rather spend my day people-watching at Walmart.  Yea…

I’m not sure what, exactly, Eddie Lampert has planned for KMart, nor do I know whether this particular store is reflective of what we should expect at an average (or majority of) KMart locations.  My brief journey today suggests Kmart apparel (which must have accounted for at least 65-70% of the floor space) is lower-priced than that sold by what I thought were its closest comps, Kohls and Target, but about on-par with Walmart**  Surely, there is plenty of room at the lower end of the market (just take a look at income/wealth distribution), but such products are generally lower-margin, and it didn’t seem like product had been flying off the shelves (of course, I’d have to go back later in the day to better judge that assertion).

Sears Holdings’ last 10-k shows that Kmart’s margin has increased while its revenues have declined by 1% while same store sales increased slightly less (0.7%), while its gross margin grew 4.6% over 2009.  I’d chalk this up to the broader economic recovery than any strategic shift by the company, and given what I saw today, I’d be surprised if the upward-trend lasts another year, much to the chagrin of SHLD shareholders…

**completely non-scientific observation

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