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Case 32: “Kmart: Striving for a Comeback”
I. Past Strategy
• Sebastian S. Kresge (1899-1959)
A. Operation
Kresge was known for his bold and innovative strategies, which included expansion into Canada in 1929, the development of a mall based store concept in the first suburban shopping center in 1937.
B. Marketing
Use of newspaper advertising circulars in the 1940.
C. Financial
Kresge’s 5 and 10 cent pricing strategy appealed to turn of the century working families and allowed him to expand the S.S. Kresge Company chain to 85 stores with $10 million in sales by 1912.
• Harry Cunningham (1959- 1972)
A. Operation
Cunningham opened the first Kmart full-line discount store in Garden City, Michigan, in 1962.
B. Marketing
The new store concepts that included a wider variety of household items and apparel than what was found in five and dimes.
C. Financial
S. Kresge Company operated 753 Kresge variety stores and 162 Kmart full-line discount stores with combined annual sales of over $1 billion.
• Bernand Fauber (1972-1987)
A. Operation
The company opened its 2000 the Kmart location. Kmart’s strategy of growth via diversification into a variety of retail business.
B. Marketing
In 1984 Kmart acquired Builders Square (a chain of warehouse style home centers and Walden Book Company, which operated Walden Book Stores in all 50 states. Payless Drug Stores, Inc., and Bargain Harold’s Discount Outlets (a Canadian retailer) were acquired ...