Turnaround Artist Takes Kmart Helm

January 28, 2002
Kmart's new chairman, James B. Adamson, is hoping to have the wounded retail giant out of bankruptcy by the end of 2002, a goal many retailing executives think is unrealistic.

Adamson

Adamson was picked to guide Kmart's attempted recovery largely on his turnaround of Advantica Corp., parent of the Denny's restaurant chain. When Adamson took over in 1995, Denny's had been losing money for years and faced payments of $54 million to settle racial-discrimination lawsuits.

Adamson instituted a program of diversity training and minority hiring and in 2001, for the second year in a row, Fortune Magazine named Advantica the nation's best company for minorities.

At Kmart, a much larger company, he faces a bigger challenge. He's expected to close hundreds of the company's 2,114 stores and fire thousands of its 240,000 employees. But beyond that, he must quickly figure out how to make Kmart fully competitive with its more efficient rivals, Wal-Mart and Target.

Among Adamson's first priorities is keeping Martha Stewart in the fold. Her popular line of household goods, Martha Stewart Everyday, is thought to be essential, at least in the short term. Ms. Stewart has said she support the company's efforts to recover.

Adamson has forged a reputation as a turnaround artist and problem solver during his nearly 30 years in the business world. Prior to Advantica, he was CEO of Burger King. Adamson is credited with helping turn around the bankrupt retail drug store chain Revco, Inc., where he was executive vice president of marketing from 1988 to 1991. Earlier, he worked as a highly-respected marketing executive at the Gap and the B. Dalton bookstore chain.

Adamson, 53, is drawing a $2.5 million annual salary. If he succeeds in getting Kmart out of bankruptcy by the end of 2002 he gets a $4 million bonus.