TROY, Mich. -- Kmart last week appointed Floyd Hall, a former supermarket and discount store executive, for the corporation's top spot, a move that could fuel the prospects of the company's supercenters, according to analysts.
Kmart named Hall chairman, president and chief executive officer of the corporation based here. Hall, 56, was chairman and CEO of Grand Union Co., Wayne, N.J., from 1984 to 1989, during which time he accomplished a major financial turnaround. Since 1989, he has been chairman and CEO of Museum Co., a chain specializing in museum reproductions. Hall was chairman and CEO of Target Stores from 1981 to 1984 and president and CEO of B. Dalton Bookseller from 1973 to 1981.
While Hall's background would appear to be tailor-made to the food and discount aspects of supercenters, analysts warned that the executive's first job will be to revive the company's ailing discount store operation.
Hall could not be reached last week for comment on the future of Kmart's supercenter operation. However, he told Women's Wear Daily, which like SN is owned by Fairchild Publications, that supercenters have good prospects.
They "are certainly a very, very viable prototype, and there's really no reason that they can't be a major part of our future business," Hall said. "We've made some mistakes in the past in some markets where we've put in a number of stores, particularly in terms of size. But the management team here has
learned a lot, and we have those mistakes corrected."
Observers told SN last week that Hall's appointment brings another skilled food eye to the supercenter effort, even though supercenters initially may not be the top priority. Gary Giblen, managing director of Smith Barney, New York, said, "Hall's Grand Union experience shows Kmart is committed to doing food right at the supercenters, though it isn't clear how immediate the push for supercenters will be.
"Hall told analysts supercenters are the growth format of the future and Kmart will concentrate on that. But he also indicated the company has to fix its discount-store division first."
Ed Comeau, a securities analyst with Lehman Bros., New York, said supercenters are unlikely to get much of Hall's attention for at least 12 to 24 months.
"Hall doesn't come to Kmart with any particular view of supercenters, though he obviously brings some understanding of both the food and the discount store sides and perhaps a sharper and more educated eye to determine how viable supercenter expansion is.
"I believe Kmart will fulfill its commitment to open 22 supercenters this year and 20 to 25 next year, but I'd be surprised to see any acceleration in the rate of growth before 1997."
At Grand Union, Hall turned a loss of $115 million in 1983, the year before his arrival there, into a pretax profit of $80 million in 1987 -- reportedly the fourth highest return on sales for the food industry that year.
With the arrival of Hall, Ronald Floto, who was interim president and chairman of Kmart's management executive committee, now resumes his previous posts of executive vice president and president of Super Kmart Centers.