Kmart Corp. today announced that it has replaced the management team steering its Chapter 11 reorganization effort, including Chief Executive Officer Chuck Conaway.
The ailing retailer, which filed for bankruptcy protection in January and announced Friday that it will close 284 stores and slash 22,000 jobs, named replacements for all its top management positions, including chief operating officer, chief financial officer, treasurer, general counsel, chief compliance officer, and senior vice president, communications.
Conaway said in a statement that he has been thinking about resigning from the CEO spot "for some time." He cited "family needs" and "professional goals."
Turn-around specialist James Adamson, chairman of Kmart’s board of directors, is the company’s new CEO. Adamson is a former head of the Advantica Restaurant Group known for turning around the Revco drug store chain during its bankruptcy reorganization. He replaces Conaway, who will be leaving both the company and the board, Kmart said.
Adamson, 54, has served on Kmart’s board since 1996 and was named its chairman in January 2002. Since then, he has served as the principal liaison between the board and senior management. His successful efforts to restructure Advantica, which operates 2,400 restaurants including the Denny's chain, led to the elimination of more than $1 billion in debt, Kmart said.
In a statement, Kmart board member Thomas Stallkamp called Adamson "the right executive to move Kmart forward." Stallkamp cited Adamson’s strong team-building and leadership abilities, his understanding of Kmart’s issues based on his tenure as a director, his retail experience and his turnaround expertise.
According to The Detroit Free Press, Kmart’s creditors and a union were angry with Conaway because he asked a Chicago bankruptcy court for permission to get $11.5 million in bonuses — even if he failed to bring Kmart out of bankruptcy. The newspaper, citing court records, said Conaway was to earn no less than $1.5 million per year, and had the potential to earn annual bonuses of up to $1.8 million.
Other management changes include the following:
Julian Day, the former COO at Sears, Roebuck & Co., is Kmart’s new president and COO. That position had been left vacant.
Albert Koch, chairman of the turn-around management firm Jay Alix & Associates, is the new CFO. Koch replaces John McDonald Jr.
In early trading today on the New York Stock Exchange, Kmart shares rose 12 cents, or 9.3 percent, to $1.41.
-- Staff and wire reports