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What’s in a name: Kmart succeeds as Kmart depletes

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  • March 21, 2017
  • The Register team
What’s in a name: Kmart succeeds as Kmart depletes

Late of September last year Sears Holdings announced its plans to possibly close 204 US Kmart stores. The same time last year Wesfarmers Kmart in Australia boosted earnings by 16.3 percent. So why are two similar stores facing two very different financial outcomes?

Both stores came from the same founder in the 60's, deal directly with cheap value ranges, focus on quantity and easy accessibility items and even have similar logos. So how is one chain dominating the industry while the other one suffers a slow demise?

Both originated in America in 1961, the Australia branch was shortly created after in 1968. Owned by separate companies now the large retailers have both suffered through up’s and downs in the changing economy.

The table below shows the difference between the two companies previous years from 2014-2017. 

Original graph showing the rise of Kmart revenue 

Not only have Sears holdings been having trouble with their Kmart branch their Sears retail shops have also been struggling

Wesfarmers Kmart’s image is a bit different to Sears Holdings. It hints that it is still youthful and cool, even though it’s good value. Their ads are often full of vibrant people aged 18-22, exceedingly lithe and probably unlikely to be found at an actual Kmart.

Inside Wesfarmers Kmart compared to Sears Holding Illinois Kmart

Sears Holdings and Wesfarmers have often been known for excessive stock within their store but with the appointment of Wesfarmers CEO Guy Russo he moved to slash product lines from 100,000 to 40,000, shifting focus to basic private label items sourced directly from factories. 

"Our customers spend an average of 20 minutes in the store shopping," Russo said.

"But when I was watching them they were spending most of their time trying to sort out the difference between the many products in the same range."

Wesfarmers official NZ Kmart Facebook has almost 90,000 likes. On other closed Facebook groups with more than 100,000 members, obsessive fans swap advice and tips about their shared obsession. 

Sears Holdings reportedly have had stockist drop out on them as their store close, a claim which was disputed by the store who say it was a mutual decision. The store has closed 204 stores this year alone and cut 130 jobs. 

The marketing strategy between the two is obviously different with one targeting homeware obsessives to the other focusing on the older customers needing more for less. Sears Holdings CEO Alasdair James quit his position he had held since 2014.

As Wesfarmers continues to dominate the market through New Zealand and Australia some website analytics are expecting Sears Holdings to completely close by mid-2018. 

Background 

Both Kmart's were founded by Sebastian Spering Kresge as one company to start with. Kmart Australia limited was born out of a joint venture between G.J Coles & Coy Limited (Coles) and S.S. Kresge Company in the United States, with Kresge owning 51% of the common stock in the company. 

In 1978 Kresge exchanged its 51% stake in Kmart Australia for a 20% stake in Coles.In 1994 Coles bought back all shares held by Kresge.

A long-term licensing agreement allows Wesfarmers to use the Kmart name in Australia and New Zealand. The 'K' in Kmart stands for his last name, Kresge.

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Allbirds launches two homages to “the drunkest bird in New Zealand”

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  • October 28, 2019
  • The Register team
Allbirds launches two homages to “the drunkest bird in New Zealand”

Every year, New Zealanders embark on a light-hearted mock election to choose the Bird of the Year. The campaign trail is filled with spirited rivalry from each bird’s campaign mananger and bird trivia flourishes. For the second year in a row, sneaker company Allbirds has partnered with organiser Forest & Bird to launch a limited collection of shoes inspired by Bird of the Year.

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The weirdest thing I’ve ever had to write is a product story on a stool for passing stool

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  • June 26, 2019
  • Courtney Devereux
The weirdest thing I’ve ever had to write is a product story on a stool for passing stool

This week on 'I can't believe this is a thing': It’s a pass to pass, a stool for your stool, a support system for your own sewage system. Honestly the fact that this is a product is mad. Apparently, the innovative thinkers at Goodstool may have a method to their madness.

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The new Apple Mac is out, good thing I have a spare 35k to spend

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  • June 5, 2019
  • Courtney Devereux
The new Apple Mac is out, good thing I have a spare 35k to spend

Apple’s products likely lead the way in design, but the point they seem to get across each release is that they also lead the way in price.

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Zavy and The Register have worked together to create a scoreboard that compares how the top 25 traditional media advertising spenders in New Zealand have performed on social media over the past 30 days, updated in real time.

 
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Hell Pizza challenges Valentine’s Day tradition

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  • February 19, 2019
  • StopPress Team
Hell Pizza challenges Valentine’s Day tradition

Yesterday, Hell Pizza challenged the idea of Valentine’s Day with a campaign promoting a night for one, rather than a night out with the masses at a restaurant or bar.

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Just in Valen-time: Krispy Kreme shows its love

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  • February 14, 2019
  • Courtney Devereux
Just in Valen-time: Krispy Kreme shows its love

Where there is a gap in the market, it will eventually be filled. So, has reigned true for the poorly timed disappearance of Candy Hearts and Krispy Kreme’s new ‘Conversation Doughnuts’ which have seemed to take the place of the classic Valentine’s Day candy.

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Real Groovy record store moves location, again.

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  • January 31, 2019
Real Groovy record store moves location, again.

Popular record store Real Groovy is moving for the sixth time in 30 years, this time only making a small hike up Queen Street where it will resettle.

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