Troubled Retailer Wants It Known It's Still Open for Business

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SAN FRANCISCO ( -- As Kmart begins its latest round of store closings, the troubled discount store begins an aggressive promotions campaign to keep its customers from further fleeing to rivals Wal-Mart and Target.

Kmart Corp., which is working its way out of Chapter 11 bankruptcy, is in the process of closing 318 stores. More than 1,500 stores in the U.S., Caribbean and Guam, however, remain in operation.

Correcting misperceptions
Kmart is trying to avoid the perception that is is closing all its stores permanently while also trying to unify its marketing message. After closing 283 stores last year, Kmart bombarded consumers in several major cities with conflicting marketing messages: Ads appeared from stores that were liquidating, while a new campaign from Martha Stewart promoted her Kmart collection. Consumers were unsure if all stores were in fact closing.

As part of the new campaign beginning Sunday, dubbed "Savings Are Here to Stay," shoppers spending $10 or more at stores slated for closure also will receive a receipt at the register good for up to $12 off on the purchase of $100 at a store remaining in business. Maps to the closest operating Kmart also will be provided at checkout.

Shopping sprees
The promotion also includes coupon books with savings up to $150, and Kmart will award 20 $500 shopping sprees. Kmart pharmacy customers transferring prescriptions to a Kmart store remaining open will receive a $10 gift card.

The campaign is backed by newspaper advertising, and through in-store and parking lot signage.

Meridian, Troy, Mich., a subsidiary of Applied Graphics Technologies' Black Dot Group, handled the promotion, a Kmart spokesman said. Kmart's general advertising agency is Omnicom Group's TBWA/Chiat/Day, while sibling Arnell handles Martha Stewart's brand advertising as well as special projects, such as the development of a remodeled Kmart store and sign.

New ads in spring
Kmart's spokesman said the next round of advertising is expected in late March or early April, about the same time Kmart plans to come out of bankruptcy.

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