PUBLISHERS EXPECT TO BE HIT HARD BY KMART BANKRUPTCY

Retailer to Continue With Circulars, New Branding Campaign

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A Kmart Corp. spokesman said the retailer will continue its newspaper circular program as planned, but newspapers and other media companies are expected to take a financial hit from the company's bankruptcy.

Knight Ridder last week indicated a "slightly" more conservative position on its financial statements as a result.

A Gannett Co. spokeswoman said Kmart's bankruptcy filing would have "no adverse effect" on its earning. Tribune Co. executives on Jan. 24 said Kmart was primarily a pre-print advertiser that had given the company about $35 million in business in 2001, of which "virtually all was paid in full," said a spokesman.

Some suppliers, such as

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Don Coleman Advertising, Southfield, Mich., Kmart's multicultural shop, have payment plans in place and continue to work on the account.

Meanwhile, Kmart, hoping to move out of bankruptcy by 2003, next month launches an advertising campaign focused on what it considers its core customer group -- moms.

Four to six spots in a new campaign shot in New York this month will be tagged "Kmart. For real life."

Spike Lee's production company, 40 Acres and a Mule, produced the spot for the retailer's agency Omnicom Group's TBWA/Chiat/Day, New York.

Don Coleman also is producing a second TV effort, an executive familiar with the situation said.

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