KMART REPORTS STORE SALES UP AS AD SPENDING DECLINES

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SAN FRANCISCO (AdAge.com) -- Kmart Chairman Chuck Conaway told investors today the discounter is doing "more with less by marketing more effectively."

In a conference call announcing the company's quarterly earnings, Mr. Conaway said Kmart has significantly reversed a five-year trend by increasing sales in stores open a year or longer by 1.7% at a time it reduced advertising 37%.

On other topics, Mr. Conaway said Kmart this fall will launch a Martha Stewart "Keeping Line," an assortment of plastic totes, brooms and other items for home and family. He also said Kmart, which recently launched its "Blue Light Always" products, will continue to increase its private-label product offerings.

Kmart spends close to $500 million on all its marketing efforts, including extensive newspaper circulars. Omnicom Group's TBWA/Chiat/Day, New York, is the agency.

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