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Kmart Revamping CE Departments

DETROIT — Kmart reportedly has begun installing new consumer electronics departments in 500 stores.

The overhaul was announced last week by Kmart chairman/CEO Chuck Conaway at the company’s annual stockholders meeting here. Conaway, who is in a desperate bid to turn around the ailing discount chain, cited the CE fix and a concurrent remodeling of its food departments for their disruptive effect on sales.

The impact, combined with changes in Kmart’s supply chain and a 20 percent to 30 percent decline in advertising expenditures, could render comparable store sales flat in the second and third quarters, he warned.

Kmart is the nation’s 10th largest CE retailer according to the latest TWICE CE Retail Registry, trailing discount chain rivals Wal-Mart (No. 6) and Target (No. 7). A Kmart spokeswoman said it was “too premature to discuss specifics” of the CE department remodelings.