A U.S. Bankruptcy judge gave Kmart Corp., Troy, MI, permission to drop its five-year-old sponsorship of NASCAR, Daytona, FL, as part of reorganization efforts. The ailing retailer filed for Chapter 11 protection last month.
Kmart closed the book on its sponsorships after honoring commitments to individual racing teams in February’s Daytona 500 and Winston Cup races. Other sponsorships are likely to come under the same scrutiny as Kmart looks to cut costs while resurrecting its image.
The chain will maintain a licensing deal with Walt Disney Co., Burbank, CA, to co-produce a new line of children’s clothing. And sponsorship of the Smithsonian Institution’s Wade in the Water gospel music tour (February PROMO) remains unaffected. Meanwhile, Martha Stewart Living Omnimedia, Inc., Chicago, which suggested a new retail partner might be required when Kmart first filed, now says it will stand by the chain-at least for the time being.
In other company news, ceo Charles Conaway resigned yesterday and was replaced by chairman James Adamson. The move followed an announcement last week that the chain would close 284 stores (13 percent of the base) and cut 22,000 jobs.
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