KMART OPENS REVIEW FOR NEW AD AGENCY

TBWA/Chiat/Day Is Incumbent on Account

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SAN FRANCISCO (AdAge.com) -- Kmart, the nation's No. 3 discount retailer which emerged from Chapter 11 bankruptcy in May, has begun a search for a new advertising
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agency, executives familiar with the situation said.

Abigail Jacobs, brand and product communication manager at the retailer, declined to discuss the review.

"I can't comment," she said.

$267 million spent in 2002
Kmart spent $267 million in measured media during 2002, according to TNS Media Intelligence/CMR.

Omnicom Group's TBWA/Chiat/Day, New York, won the account two years ago. Since then, Kmart has run through five marketing directors. Steve Feuling, senior vice president of marketing, left in March, and his duties shifted to Barbara Firment, who oversaw print advertising. About three months later, Ms. Firment left and was replaced by Karen Austin, who was chief information officer.

Shifting strategies
During its term as agency of record, TBWA/Chiat/Day handled Kmart's Blue Light relaunch in 2001. That was followed by an "everyday low-price" strategy, pitting it head-to-head with industry giant Wal-Mart, a strategy pushed for by former CEO Chuck Conaway that was partly responsible for plunging the retailer into bankruptcy. Since then, Kmart had sought to expand its private-label lines with Joe Boxer and Martha Stewart to emphasize its positioning as a high-low retailer.

Kmart's print advertising is handled by Meridian Advertising, Troy, Mich., and its multicultural efforts by Altura, Denver.

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