Kmart Selects Grey Global Group As New Primary Advertising Agency

Kmart Management Corporation announced today the selection of Grey Global Group as its primary advertising agency. The working relationship will begin immediately and Kmart's new advertising and marketing campaigns will launch during the third quarter of 2003.

Commenting on the selection, Julian C. Day, President and CEO of Kmart said, "We are delighted to announce our new strategic partnership with the Grey Global Group. Together, we will find creative ways to communicate the unique strengths of Kmart to the 'new America' consumer."

Grey will be responsible for future media planning and buying, and TV, radio and magazine campaigns along with marketing and consumer outreach for Kmart.

Karen Austin, Chief Marketing Officer of Kmart said, "The Grey team brings a wealth of advertising and marketing expertise to our partnership. We are thrilled to utilize their experience to create solid communications that will help re-position the Kmart brand."

Commenting on winning the Kmart account, Edward H. Meyer, Chairman, President and CEO of Grey Global Group said: "We are excited to bring the talents of our various multi-ethnic and multi-disciplined marketing communications companies together for the opportunity to re-position and strengthen Kmart as a premier brand."

The Grey Global entities involved with the Kmart account include Grey Worldwide New York, WING Latino Group, Alliance, G2 Worldwide, MediaCom and Carol H. Williams, Grey's African American Communications strategic partner.

Grey Global Group (NASDAQ: GREY) ranks among the largest global marketing communications companies in the world with offices in 87 countries. Grey Global Group operates branded independent business units in many communications disciplines including general advertising, public relations/public affairs, direct marketing, Internet communications, healthcare marketing, and on-line and off-line media services. Grey's major global clients include Procter & Gamble, GlaxoSmithKline, Mars, Oracle and Warner Brothers.

Kmart Holding Corporation (NASDAQ: KMRT) and its subsidiaries (together, "Kmart") is a mass merchandising company that offers customers quality products through a portfolio of exclusive brands that include DISNEY, JACLYN SMITH, JOE BOXER, KATHY IRELAND, MARTHA STEWART EVERYDAY, ROUTE 66, SESAME STREET, and THALIA SODI. Kmart operates more than 1,500 stores in 49 states and is one of the 10 largest employers in the country with 170,000 associates. For more information visit Kmart's website at www.kmart.com .

  Cautionary Statement Regarding Forward-Looking Information and Other
   Matters

Statements made by Kmart which address activities, events or developments that we expect or anticipate may occur in the future are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect Kmart's current views with respect to current events and financial performance. Such forward-looking statements are based upon assumptions concerning future conditions that may ultimately prove to be inaccurate and involve risks, uncertainties and factors that could cause actual results to differ materially from any future results, express or implied, by such forward-looking statements. Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, factors relating to Kmart's internal operations and the external environment in which it operates; marketplace demand for the products of Kmart's key brand partners as well as the engagement of appropriate new brand partners; increasing competition from other retailers; Kmart's ability to operate pursuant to its exit financing facility; Kmart's ability to obtain and maintain normal terms with its vendors, attract and retain customers, obtain and maintain appropriate inventory, implement its business plan and strategies, attract, motivate and/or retain key executives and associates; and other risks detailed in Kmart's Securities and Exchange Commission filings. Kmart undertakes no obligation to release publicly the results of any revisions to these forward looking statements to reflect events or circumstances after the date such statements were made.

SOURCE: Kmart Management Corporation

CONTACT: Michele Jasukaitis of Kmart Corporation, +1-248-463-5200; or
Jan Sneed of Grey Global Group, +1-212-546-2422, or Cell: +1-917-543-4125

Web site: http://www.kmart.com/