IRELAND, KMART TEAM IN EXTRAS CAMPAIGN

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Kmart Corp. is counting on supermodel Kathy Ireland to give the retailer a quick boost in the key area of apparel sales.

As Kmart's newest spokeswoman, Ms. Ireland will appear in spots breaking Nov. 14 that tout her new clothing line, Kathy Ireland Active.

The beautiful young model is one of three women plugging private labels for Kmart, part of a renewal strategy to provide high-quality merchandise at low prices.

By using celebrities like Ms. Ireland, Jaclyn Smith and Martha Stewart, Kmart is trying to make a name for itself among busy, budget-conscious women and bring them into its stores with high-profile private labels.

Ms. Ireland told Advertising Age, "The concept behind the commercial is that everybody is too busy to have time to worry about what to wear."

The spot shows her doing everyday duties like changing her baby's diaper. The feet of 5-month-old son Erik make their commercial debut in the spot.

"Celebrities are an extra at Kmart. The lines of these celebrities are exclusive to Kmart," said Gerald Habeck, VP-advertising.

Ms. Ireland and Ms. Smith will be featured in the second wave of Kmart's Extras campaign, which broke Sept. 18. Ms. Stewart will not appear in this round of commercials but will in later spots, Mr. Habeck said.

The Extras campaign, created by Ross Roy Communications, Bloomfield Hills, Mich., advertises special services, policies and sale items offered at Kmart.

By using these celebrities, Kmart hopes to create credibility very quickly and persuade people to come into the stores right away as opposed to creating recognition for company-branded private-label products.

Kmart Chairman-President-CEO Joseph Antonini is being pressured by stockholders to turn around the company's financial picture. The No. 2 retailer posted a net loss of $974 million for 1993 and expects a decline in 1994 third-quarter earnings because of a recent weakness in apparel sales.

"Kmart has a real issue of growing profits today. If Kmart developed its own line with its own name it would take them many years to develop a good reputation," said Brian Kardon, director at Braxton Associates, a Boston consultancy.

"Ideally, not using celebrities would be the way to go [for Kmart]," he said. Celebrity-branded products have a shorter shelf life, Mr. Kardon said, and a better long-term tack for the company would take a "much more steady, slower approach to develop its own brand names."

Wal-Mart Stores might also be looking to go the celebrity route. Women's Wear Daily reported that Kathie Lee Gifford might be eying a new line of dresses and sportswear aimed at the mass market, reportedly for Wal-Mart. However, Wal-Mart has not confirmed that.

Dayton Hudson Corp.'s Target Stores unit has not employed the celebrity strategy.

"Kmart, Wal-Mart, and Target are all targeting women and apparel and converging on the same opportunities. It is a tremendous convergence and they all can't win," said Mr. Kardon.

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