Asheville Citizen-Times from Asheville, North Carolina • Page 14

CITY A A A A am ON 6 VISIBLE FRIDAY, MARCH 19, 2004 ASHEVILLE CITIZEN-TIMES KMART: Retailer aims for 'neighborhood store' niche Continued from B8 Wal-Mart Stores Inc. and Target ship with the domestic maven's Kmart attributed its better performance to improvements in inventory management and pricing. Gains of $86 million on real estate sales in the fourth quarter also contributed. "By giving careful thought to the processes of sourcing, logistics, pricing, inventory management and in-store presentation, we have significantly improved the profitability of our market basket," chief executive Julian Day said in a statement. Day said Kmart ended the year with inventory of $3.3 billion, a reduction of 25 percent over last year on a comparable store basis.

Kmart said the decline in same-store sales was caused by promotions held the previous year and a reduction in advertising in fiscal 2003. The decrease in total sales was compounded by the closure of 316 stores during the first quarter of 2003, it said. "Financially, it's arguably the best and one of the more brilliant turnarounds in retail. From a sales standpoint, it's one of the most disappointing," said Burt Flickinger, managing partner of Strategic Resource Group. Arun K.

Jain, a marketing professor at the University at Buffalo, said Kmart should be worried because competitors Corp. saw a an increase in fourthquarter sales. But Marisa Lenhard, a retail analyst at Sigma Investment Counselors in Southfield, said Kmart was right to focus first on profitability before addressing its customer base. "When you come out of bankruptcy, the first thing you want to do is show a profit," she said. Chief financial officer James D.

Donion III said Kmart was not worried about declining sales. "Our focus is on managing for profitable sales," he said. "It's from that that we can build the strength of the company." In recent months, Kmart has worked to clean up its stores with a more shopper-friendly layout. It has also tried to position itself as the "neighborhood store" by making sure the products on the shelves match a particular store location. That idea could be a good niche for Kmart between priceslashing Wal-Mart and trendy Target, Jain said.

But so far, the company has failed to move far enough in that direction, he said. Kmart faces new challenges after Martha Stewart was convicted this month of lying to the government about a stock transaction. The retailer staked much of its turnaround on its partner- The Gift Experts 1-828-274-1552 Jeff Clein, 33 gave his wife an iron for her birthday. We can help. Lame Gift Syndrome (LGS) is a serious affliction that affects millions of guys.

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Meanwhile, competitors are closing in with similar brands, Flickinger said. Kohl's Corp. has a Laura Ashley line, and J.C. Penney Co. is launching products designed by ing, Madden.

author Chris Casson ON THE NET: www.kmartcorp.com OBITUARIES More OBITUARIES on B4 JAMES A. WILSON DEAN CLARK BAKERSVILLE James Avery MORGANTON Dean Clark, 63, of DAVID BALENTINE Wilson, 74, of Bakersville, passed Morganton, died Wednesday, March WAYNESVILLE David Murff away Thursday, March 18, 2004. 17, 2004. Balentine, 57, of Waynesville, died The funeral service The funeral service will be held at Thursday, March 18, 2004. will be held at noon 11 a.m.

at Christ United was the of Derry Saturday in the chapel Methodist with visitation one He husband Friday, Edwards Balentine. of Henline-Hughes hour prior to the service. Burial will The funeral service will be held at Funeral Home with visi- be in Burke Memorial Park. p.m. Saturday chapel tation one hour prior to Sossoman Funeral Home is 2 in the of Garrett Funerals and Cremations the service.

Interment will be in assisting the family. with visitation from 12:30 to 2 p.m. the service. Burial Snow Hill Cemetery. prior to will be in CORDELIA PERRY Bethel Community Cemetery.

WILBURN 'BUG' COFFEY MORGANTON Cordelia Justice HENRY SAYLES MORGANTON Wilburn C. "Bug" Wednesday, March 17, 2004. Perry, 73, of Morganton, died BLACK MOUNTAIN Henry Halsey Coffey 76, of Morganton, died The cryptside service will be held Sayles, 91, of 60 Wagon Trail, Black Wednesday, March 17, 2004. at 2 Saturday at Burke The graveside service will be held p.m. Mountain, died Tuesday, March 16, at 11 at Burke Memorial Park Mausoleum.

2004. Memorial Park. Visitation for family, neighbors a.m. Saturday Penland Sons Funeral Home, Funeral Home is and close friends will be held from 6 Swannanoa, is assisting with the the to 7 p.m. Friday at Sossoman Sossoman Sayles family.

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