FORMER KOHL'S EXECUTIVES USE NOSTALGIA TO BUILD A NEW BRAND

MARK HAMSTRA

MILWAUKEE -- Reports of Kohl's demise may have been a bit premature.

Two former executives of the supermarket chain have launched an effort to "bring back the Kohl's of the 1960s" by creating a new concept that attempts to revive the small-town independent grocer ambience that characterized Kohl's in its early days. The chain was shuttered last year by A&P, Montvale, N.J.

"It's just a really good time for an independent to run a store the way it used to be run in the '60s," said Bill Koberstein, senior vice president, Country Markets USA here, in an interview with SN. "Milwaukee is kind of in turmoil -- all the Sentry stores were bought by Supervalu, which acquired them from C&S, and Piggly Wiggly hasn't really been expanding."

Koberstein, who spent 34 years with Kohl's and, as director of perishables, was among the last to leave when A&P pulled the plug on the chain last year, said he saw an opportunity to create a new concept for the area that would emphasize service and nostalgia.

"I had numerous job offers [after Kohl's closed], but my wife and I decided we didn't want to move," Koberstein told SN. "The next thing you know, a new chain is going to come out of the ashes."

He got together with another former Kohl's executive, Dave Wojciechowski, who holds the title of vice president of construction and engineering -- the same title he held at Kohl's -- and another investor, who he declined to identify, to start up Country Markets USA. The three have a combined 101 years of retail experience, Koberstein said.

"We're lean and mean," Koberstein said. "We don't have to have 20 VPs in the corporate office. I put the labor in the stores."

The company opened its first Country Market on the site of a former barrel-roofed Kohl's store in Racine, Wis., in August. The 34,000-square-foot location features 5,000 square feet of produce and service bakery, deli and meat departments. Koberstein said the company is planning to open a 10,000-square-foot liquor store alongside the supermarket.

A second Country Market, which will not be on the site of a former Kohl's, is slated to open within a month. Koberstein declined to reveal the location of that store. He said he expects additional locations to open beyond the first two as well.

At the first store, which employs 114 people, workers bag customers' groceries and carry them to their cars, "just like they did in the '60s," Koberstein said.

The store is decorated with a country motif and features whimsical signs bearing illustrations of such cartoon characters as "Lucy Lettuce" and "Peter Peach."

The motto of the company -- a dig at Kohl's previous ownership -- is, "Owned by the people of Wisconsin, run by the people of Wisconsin, for the people of Wisconsin."

"We feature a huge variety of items that are produced locally," Koberstein said. "We give the little suppliers a chance, so they don't have to go in and pay $5,000 to $10,000 per store in slotting fees in a warehouse. We let them do direct delivery and give them a chance."

Country Markets is sourcing most of its product from Certco, a cooperative wholesaler based in Madison, Wis.

Among the local products Country Markets offers are those from Door County, Wis., an area known for its cherry orchards; 14 varieties of Hoff's bratwurst; and Jim's Pizza, which produces its frozen pies near the first Country Market in Racine.

In another throwback to decades past, the store offers a wide assortment of bulk candies, including such nostalgic items as wax lips and miniature liquid-filled wax bottles.

"There's a niche for us here to compete with the big boys," Koberstein said. "We are doing very well, and we will continue to expand, and we will be a force in southeastern Wisconsin."

Local observers indicated Country Markets will have its work cut out for it as it attempts to compete with the likes of Roundy's, whose Pick 'n Save chain accounts for about half of the market share in Milwaukee.

"I don't know if they have the financial backing to compete with the big chains like Pick 'n Save," said David Livingston, a Pewaukee, Wis.-based retail consultant. "Plus, we've got Costco coming into the market."

After A&P shuttered its 23 remaining Kohl's stores last year, Roundy's acquired five of the stores, and most of the others have been picked up by other supermarket operators, Livingston said.