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Kmart aims for teen appeal with Joe Boxer line, edgy ads
Wed Jul 31, 9:20 AM ET
Theresa Howard USA TODAY

NEW YORK -- Kmart wants teens, a market where it has not been strong, and thinks it now has a product line to appeal to them. So as the retailer moves to stem a continued decline in same-store sales, it's doubling its back-to-school ad budget and making teens the primary target.

The 1,800-store chain becomes the exclusive retailer of the youth-oriented Joe Boxer apparel label Thursday. Ads that began airing this week are the start of about $12 million in advertising Kmart will use to promote Joe Boxer to notoriously fickle teen consumers, who wield $170 billion in spending power.

''We need to get young people to think our stores are young and hip,'' says James Adamson, Kmart's chairman and CEO. ''And Joe Boxer goes after the youth market more than anything else we do.''

The line fills a void in the stable of exclusive brands at Kmart, whose core shoppers have been women ages 35-45 and their kids. The retailer has said its future depends on promotion of its exclusive brands, rather than trying to undercut the competition purely on price. Those brands include Martha Stewart Everyday for the home, Kathy Ireland and Jaclyn Smith fashions for women and Disney Kids apparel for children. Adamson says he's in ''hot pursuit'' of an exclusive line for the African-American and Hispanic markets.

To target teens, Kmart unveiled a series of 15-second ads Sunday that move Joe Boxer and its sassy, smiley-face ''Licky Logo '' beyond its well-known underwear and sleepwear. Kmart needs Joe Boxer's trendy pants, tops and home goods to work. Since filing for bankruptcy protection in January, monthly same-store sales have been off as much as 16% vs. the year before. The decline was 8.7% for the five weeks ended July 3.

The Boxer ads by TBWA/Chiat/Day, New York build on Kmart's ''Stuff of Life'' ad theme that began in February. In one ad, a buff guy in boxer briefs does a high-energy dance, happy that Kmart has Joe Boxer. Another ad shows a couple riding a bicycle in circles as the woman says, ''Before going to bed, always put on a smiley face.'' In another, a guy says, ''Put some bounce in your boxers.''

''They are a little edgy,'' says Adamson, who plans to wear his own ''Licky Logo'' watch to the merchandise launch in New York on Thursday. ''We're expecting letters. But the audience is young, and we've got to appeal to the youth.''

In the meantime, Kmart goes into a critical selling season with declining same-store sales, but Adamson says it's not make or break it -- yet.

''We have plenty of cash and liquidity,'' he says. ''Our sales are not far off from what we planned for the year because we knew it would take time. Next year, it starts to get fairly critical in that we have to get people confident that we are a strong and viable entity.''

Joe Boxer founder and ''chief underpants officer'' Nicholas Graham says he's convinced. ''It's never been an issue for us,'' Graham says. ''Fundamentally, Kmart is not broken. It's still a very strong brand, and at the end of the day, I think we can really help Kmart.''