TROY, MI: IR powerhouse Kekst & Company is assisting long-term
client Kmart with its Chapter 11 bankruptcy proceedings. However, the
retailer appears to be facing more general PR challenges without its
usual stable of agencies.
Firms that have previously worked with the Michigan-based company - John
Bailey & Associates, Golin/Harris International, The MWW Group, and
Hermanoff & Associates - said they do not currently provide PR counsel
When the discount house announced its bankruptcy filing six days ago,
its media hotline referred inquiries to its website - but the news
portion of the site wasn't working. The company also made a VNR
featuring CEO Charles Conway available via satellite, in which he
discusses the filing.
Kevin Foley, president of KEF Media in Atlanta, praised the company's
choice of a VNR over a more interactive SMT.
"The one-way communication a VNR affords is probably a sound strategy in
a case where tough questions would likely be asked. There's probably a
lot of questions they don't have answers to right now," said Foley.
But retail PR specialists have warned that Kmart must quickly step up
its PR to assure customers, employees, and suppliers that it will
continue operations as it moves through bankruptcy.
With media reports saying customers shop at competitors because they
think Kmart stores may close, Luke Haase, a principal with Traverse
City, MI, PR firm The Intelligence Agency, said Kmart must make it clear
that it is open for business.
"They've got to put some perspective around what's happening and say,
'We're open, we have good deals, and this too shall pass,'" said Haase,
who has done project work for Kmart.
John Bailey, president of the Detroit-area firm that bears his name,
agreed, saying, "The last thing Kmart needs is someone speculating about
Bankruptcy courts traditionally allow companies to spend money on PR and
IR because they recognize it is important to maintain communication with
key audiences, explained Larry Smith, president of the Institute for
Crisis Management. He said Kmart must communicate to employees and
"Failing to do that just makes the process more difficult," said
"The risk grows every day if they're not proactive."