TBWA, DON COLEMAN OWED $8.7 MILLION BY KMART

Retailer Continues Latest Branding Efforts

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SAN FRANCISCO (AdAge.com) -- Kmart Corp., Chicago, owes its advertising agencies $8.7 million, according to documents filed in its Chapter 11 bankruptcy proceedings.

The retailer's agency of record, Omnicom Group's TBWA/Chiat/Day, New York, is owed $5.4 million, and Kmart's mutlicultural agency, Don Coleman Advertising, Southfield, Mich., is owed $3.3 million, according to two separate filings of unsecured claims with the bankruptcy court.

No comment
Don Coleman Advertising last week changed its name to GlobalHue. The agency's chairman, Don Coleman, declined to comment. A spokesman for TBWA/Chiat/Day said the agency did not comment on financial matters pertaining to its clients.

Bankruptcy attorneys

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say that creditors are usually paid back at one third the value of the unsecured claim -- money owned before the corporation files for bankruptcy -- if the debtor company continues operations, and as little as 10% if the company liquidates. If suppliers stay on with the company, as is the case with the two ad agencies, they stand to secure a higher payment.

Kmart in January filed for chapter 11 bankruptcy. The filing followed last year's relaunch of the Kmart brand behind two promotional efforts, first using a BlueLight theme, and then a low-price strategy. The BlueLight campaign was the first work from TBWA/Chiat/Day.

Multicultural efforts
More recent efforts have centered on a campaign tagged "Kmart: The Stuff of Life." On Sunday, Kmart launched a separate TV campaign aimed at African-American and Hispanic shoppers featuring original music from Jose Feliciano, Chaka Kahn and BeBe Winans. GlobalHue handled that effort.

Staff writer Jean Halliday contributed to this report.

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