TROUBLED KMART FOLLOWS THE BLUE LIGHT

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DEARBORN, Mich.-Kmart Corp. is breathing new life into a longtime tradition-blue light specials.

Last week while addressing unhappy shareholders at Kmart's annual meeting, Chairman Donald Perkins indicated the No. 2 retailer will increase use of the icon that signals an in-store promotion.

Most Kmart consumers "are familiar with our well-recognized Kmart logo and our reputation for value-particularly our `blue light specials,'*" he said.

Although the blue light strategy has never been totally abandoned, the struggling retailer is looking to step up the use of its bargain symbol.

Some retail marketing consultants say they believe the rejuvenation of blue light specials along with the selection of Campbell Mithun Esty, Minneapolis, as the retailer's new agency signals a renewed commitment to marketing.

"The blue light special is an interesting ploy," said Donald Stuart, partner at Cannondale Associates, a Wilton, Conn.-based sales and marketing consultancy. "But it is a positioning that has to be updated to the '90s. It can't be the same blue light special that it was in the '60s."

Judith Langer, president of Langer Associates, New York, didn't believe bringing back the blue light was enough to turn the retailer around, but added consumers are still in the mood for bargains.

Kmart has had nine straight quarters of declining earnings, and has struggled to define itself as Wal-Mart Stores captured the low-price positioning and Dayton Hudson Corp.'s Target Stores appealed to more upscale customers.

At the annual meeting, Kmart executives refused to speculate about its future CEO.

Mr. Perkins said the company is looking for someone from the outside that can be a "team leader."

As far as the speculation about board member Richard Cline, chairman-CEO of Nicor, Chicago, being tapped for the job, "Only The Wall Street Journal offered the position to Mr. Cline," said Mr. Perkins, referring to a report in that publication.

Outside candidates believed to be in the running include: Kenneth Macke, former chairman-CEO of Dayton Hudson Corp.; Michael Bozic, president-CEO of Hills Stores Co.; and William Fields, VP-merchandising and sales at Wal-Mart.

Julie Ralston contributed to this story.

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