PLAYER OF THE WEEK;PEOPLE;NEW KMART AD CHIEF DAVIS RUNNING $175 MIL BUDGET: WATSON'S EXIT MOVES FORMER SEARS MARKETER UNDER OLD BOSS FLICK AT RETAILER

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Larry Davis' marketing role at Kmart Corp. just got bigger.

A lot bigger

Mr. Davis, VP-advertising, moved up to head marketing last week after the departure of his boss, Kenneth Watson, exec VP-marketing and product development. Kmart's marketing budget for 1995 was $175 million.

William Underwood, senior VP-vendor and product development, assumes Mr. Watson's product development duties. Both men report to Warren Flick, exec VP and president of U.S. Kmart stores.

EXEC TEAM REUNITED

This is not the first time Mr. Davis, 52, has reported to Mr. Flick.

The two met working for Sears, Roebuck & Co. During 1995, Mr. Davis was a consultant to Young & Rubicam de Mexico developing marketing, advertising and promotional strategies for the agency's client Sears de Mexico where he reported to then-Chairman-CEO Mr. Flick.

The majority of Mr. Davis' career, from 1965 to 1993, was spent at Sears where he rose to national marketing manager.

Mr. Flick was responsible for hiring Mr. Davis in January. Mr. Flick is credited with playing a key role in turning around the once-troubled Sears stores. He has made several executive changes to strengthen Kmart's merchandising area, bringing in many new executives over the last several months, most of whom previously worked at Sears.

DEPARTURE NOT SURPRISING

The sudden departure of Mr. Watson was not a surprise to many industry observers. He was hired by former President-CEO Joseph Antonini in October 1994 and was the only top marketing officer left from the old Kmart leadership.

During his reign as marketing chief, Mr. Watson lead the troubled retailer through an agency review process in which he helped select Campbell Mithun Esty, Minneapolis. Insiders said that even with Mr. Watson's departure, the relationship is still strong.

"Ken Watson enhanced Kmart's advertising with the selection of our new strategic advertising agency, Campbell Mithun Esty, and through them, has developed a more focused marketing effort during his time at Kmart. We wish him well in his new endeavors," said Mr. Flick in a statement to the press.

Kmart hasn't decided whether it will replace Mr. Watson, but executives close to Kmart said that is not a top priority. For now, Mr. Davis is in control of Kmart's marketing and ad plans.

AD DUO RETURN FOR '96

The retailer last week signed both Rosie O'Donnell and Penny Marshall to do all of Kmart's TV advertising in 1996. The two starred in the retailer's holiday advertising, created by CME.

The new spring campaign using the two stars is expected to break in late April. The campaign will be promotional and product/category specific like its holiday effort. Image ads for spring are not planned.

Those who have previously worked with Mr. Davis said he is energetic with a good retail marketing background and will be a good fit for Kmart.

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