Kmart Testing New Prototype Store

White Lake Township, Mich.— Kmart has completed work on a new prototype store that was designed to address some of the problems plaguing the bankrupt discount chain.

The store, located here in northern Michigan, is an existing unit that has been undergoing an on-the-fly facelift since August. The most striking change is the lime green color scheme, which is carried over into a revamped corporate logo featuring a large "K" and word "mart" scripted along the diagonal.

The store also boasts wider aisles, brighter lighting, new signage and a reconfigured floor plan, in an effort to improve the shopping experience for customers.

Kmart says the changes are based on feedback from shoppers and employees, who have critiqued the chain for its dingy stores, cluttered aisles and out-of-stock items. The company is addressing the problems chainwide with improved housekeeping, widened aisles and new software at its distribution centers that should help keep shelves filled. But Kmart first wants to test customer reaction to the prototype — which it describes as a concept store — before implementing more of its elements.

In other news, the company said it now plans to emerge from the bankruptcy protection as early as the first half of next year. "I am as confident as ever that Kmart can emerge from Chapter 11 as a strong and viable competitor with a clearly defined niche in the discount retail sector," said chairman/CEO James Adamson.

Others are less certain. Pointing to continuous comp sales declines, despite the closure of 283 stores, some analysts are questioning whether the company can even survive the current holiday quarter, which is shaping up to be a brutal one for retail.

In it most recent earnings statement, Kmart reported a loss of $377 million for the second quarter ended July 31, while net sales fell 15.7 percent to $7.52 billion, and comp sales dropped 11 percent.