The discount department store will commence rolling out brand-free product in stores from July 2011 across footwear, menswear and underwear, with womenswear and kidswear to follow.
Kmart general manager of apparel Andre Reich said the strategy was designed to create distance between the consumer and Kmart's former fashion offering.
“The more anonymous a style is … the better it sells,” Reich said. “So if she kicks her shoes off at a party, nobody will know where she bought them from.
“She can either be proud of it and say 'I bought it at Kmart', which is where we hope her psyche goes but if that doesn't happen I'm not alienating her with my past.”
Also commencing in July is a reduction in retail price points across apparel staples. Items such as men's printed t-shirts will drop from $9 to $7 as a result of both sourcing and volume changes.
“The teams are all travelling now to Bangladesh because it's the lowest priced country to source from,” Reich said. Other manufacturing has been moved to northern China “where labour is less”.
Meanwhile, a 40 per cent increase in volume in its apparel and footwear business has meant Kmart can utilise the services of higher-volume, vertical factories.
“There's still some part of our range that we buy tight, which is the more high fashion or on-trend pieces,” he said. “Most of what we are buying now has much more volume. In some areas we're buying 40,000 units per colour.”
Helping to boost sales is the introduction of tables as a visual merchandising tool. After a successful trial in September 2010, Reich rolled out 16 tables in each Kmart store's apparel division last month, with each table capable of holding 600 units to an equivalent clothing rack's 180.
“33 per cent of my unit volume comes out of the tables now,” Reich said.
Underlying the next six months of trade will be a renewed focus on Kmart branding.
“The thing we probably haven't done that well is landed that message with consumers, that it's 'low prices everyday'. That's what we're working on for the next six months.”
Kmart has 185 stores nationally, including 22 stores that trade 24 hours a day. While apparel and footwear currently account for 47 per cent of Kmart's business, the retailer also sells goods such homewares, toys and automotive supplies.
Kmart commenced its restructure following the appointment of general manager Guy Russo in October 2008. The retailer is owned by Wesfarmers, a publicly listed company which also operates Target.
Erin O'Loughlin