business news in context, analysis with attitude

We reported yesterday that Kmart plans to remodel as many as 20 stores, creating a retail format that has brighter colors, wider aisles, better lighting ands lower shelves. The cost of remodeling all 20 stores will be between $200,000 and $400,000 apiece.

In our commentary, we expressed skepticism: “Twenty stores does not constitute a makeover. We still think that management is in the Kmart business for the real estate sales, not because it has any interest in or commitment to retailing. Besides, you can’t help but notice that as Kmart announces that it will give 20 stores a paint job and some new light bulbs, Wal-Mart says it will open some 300 new units. The contrast is stark. Kmart’s future as a retailer is grim.”

One MNB user wrote:

I'm not buying either. $200,000-400,000? You might as well said $20-40. It’s nothing. Kmart is counting on the fact that most Wall Street analysts won't have a clue on what is a remodel and what is a "coat of paint." Twenty stores is nothing and there is no meaningful investment. Most companies would not even make this type of insignificant announcement. This is nothing more that routine maintenance.

Another MNB user wrote:

Out of curiosity, I stopped in the Kmart store near its headquarters in Troy, Michigan. At 6:30 Sunday night there were only 25 or so cars in the parking lot!

The exterior of the store was in the process of being painted orange. I thought this was one of the stores being converted to a Home Depot.

The first thing I saw upon entering the store was a cloth covered card table with mini painted pumpkins. A hand written sign stated the pumpkins were 75 cents each. There were only 2 registers open (cashiers were chatting), but then again, there were only a few shoppers. The store was clean with too much open space. It didn’t look shopped in. The jewelry counter and snack shop were darkened.

The merchandise presentation and quality of merchandise was much better than my last visit; it was clean and the lighting was bright. I give Kmart credit for trying, but it’s too late. With Meijer and Wal-Mart two miles away, Kmart shoppers migrated to the competition and didn’t come back. It’s going to take a lot more than “pretty” stores to bring shoppers back in.

MNB user Chuck Barbee chimed in:

$200-400,000 to remodel a monster Kmart...they missed the boat, they should be in Las Vegas, headlining as magicians!

We also wrote yesterday about the growing popularity of poker and the opportunities that it offers retailers.

One MNB user wrote:

I'll say it's popular! I picked up a 12 yr. old for an out of town soccer game on Sunday. On Saturday night, his family hosted 20+ boys -- three tables -- for poker. Each kid put in $10 and there were prizes from 1st through 8th place.

Another MNB user wrote:

One of the pastimes my brother and I most enjoyed growing up in the 60's was playing cards. Our parents owned a grocery store and we learned to count and manage money early. We translated that to the discipline of understanding cards and their number values. While playing cards in the "Bible Belt' was somewhat frowned upon, my parents could see the benefits of the various games we played including poker. The golden rule was to never get in a game and wager more than you had on you or could afford to lose. I still play whenever possible and enjoy the game under that rule as it was designed....for entertainment and socializing.

My wife and I taught our both our daughter and son to play and my 23 year old daughter and I enjoyed a spirited game of Cribbage while she was visiting us this past weekend. Playing cards is something that can be done for all one's life as it can be enjoyed with all age groups participating.

Stock up on those chips, cards and tables for the Holidays!

But another MNB user didn’t see the charm:

I wish I could share your enthusiasm but I've seen the gambling addiction destroy people and their families…So to let your son play at that age and condone it, in my opinion you might as well let them get drunk while you're at it.
KC's View: