ROANOKE TIMES 
                      Copyright (c) 1996, Roanoke Times

DATE: Friday, February 2, 1996               TAG: 9602020072
SECTION: BUSINESS                 PAGE: B-7  EDITION: METRO 
SOURCE: The New York Times 

KMART REVAMPS ITS MANAGEMENT

DEFYING THE DIRE forecasts, the ailing discount chain refuses to die.

For months, Wall Street has been waiting at the end of Kmart Corp.'s bed with a casket. But the discount chain just would not die.

Now retail experts are singing a new tune, although some are miffed that their dire prognosis did not come true.

The change in outlook was a result of the patient's stubbornness. Information trickling from the company seemed to confirm that a turnaround plan has been under way at Kmart corporate headquarters in Troy, Mich. - although chief executive Floyd Hall has not always been explicit about how the company plans to avoid having to file for bankruptcy protection.

Thursday, the company announced key management changes it is counting on to boost pitiful profit margins. The company dismissed both the merchandising manager in charge of women's apparel and its general merchandise manager.

Kmart plans to give responsibility for some home goods to Gilbert Wachsman, a senior vice president, and name a new manager for apparel and soft goods for the home. All of them will report to Warren Flick, the company's president and general merchandise manager.

``This move indicates that we are raising the bar,'' said Hall in a telephone interview Thursday. ``We are looking for a higher standard of specialization.''

The market reacted well; the stock rose 75 cents to $6.625 on the New York Stock Exchange. Traders said buyers were stepping up after weeks of relentless selling.

Even those who have openly mocked previous announcements by Kmart, such as its plans to lure the masses with consumable goods such as potato chips, seemed pleased about the new management strategy.

``I have effectively firmed up my opinion that the vendors are not going to let this company die,'' said Walter Loeb, a retail consultant.

Hall said Kmart was negotiating with banks for a loan. The company also is likely to sell some type of security to the public.

The retailer has been in a tight cash squeeze for some time. It suffered 11 straight quarters of poor earnings, and its credit lines have been frozen. It owes $2.7 billion that must be paid by October 1997.

LENGTH: Short :   48 lines