Kmart Promotes Kevin Phillips to Senior Vice President, Store Operations And Names Rose Reza Senior Vice President, Southeast Division

Kmart Corporation (NYSE: KM) today announced the promotion of Kevin Phillips, 49, from Senior Vice President, Southeast Division to Senior Vice President, Store Operations, effective immediately. Reporting directly to Executive Vice President, Store Operations Mark Schwartz, Phillips will be responsible for the operations of the retailer's four geographic divisions.

Phillips joined Kmart in 2000 from Office Depot where he served in several high-level operations positions including Executive Vice President, International Retail. He also held operations positions with Rickel Home Center and Child World.

"The store operations expertise Kevin Phillips brings to this post will be key to Kmart's efforts to improve store execution and customer service," said Schwartz.

Additionally, Kmart announced the appointment of Rose M. Reza, 38, to Senior Vice President, Southeast Division. Reporting to Kevin Phillips, she will be responsible for overseeing the operations of approximately 550 stores and 50,000 associates in 9 states.

"Rose Reza brings 15 years of retailing experience to her post with Kmart. Her proven ability to convert under-performing markets into profit centers will benefit Kmart's efforts to improve our performance," said Phillips.

A 15-year Wal-Mart veteran, Reza joins Kmart from her post as Regional Vice President responsible for the South Florida region. She joined Wal-Mart as a management trainee in 1986 and progressed through the ranks of store manager, district manager and regional vice president. Reza is a graduate of the University of New Mexico where she received a Bachelor of Arts in Business Administration.

Kmart has made significant progress in recruiting top retail talent to lead the company's turnaround strategies. Since Chairman and CEO Chuck Conaway joined Kmart in May 2000, more than 30 executives from various retail companies have signed on to be a part of the retailer's exciting resurgence.

"Through their outstanding leadership skills, this new team has spurred significant change in our stores as well as at our headquarters," said Conaway. "Kmart's new management team believes our strategies will close the gaps with our competition. This team has the bench strength to accomplish these goals and more as we focus on bringing our customers an unprecedented shopping experience."

"As Kmart closes competitive gaps even more and makes progress on our performance goals, we are confident more people will be eager to join our team and be a part of this exciting retail story," added Conaway.

Kmart Corporation is a near-$40 billion company that serves America with more than 2,100 Kmart and Kmart supercenter retail outlets. In addition to serving all 50 states, Kmart operations extend to the Caribbean Islands and Asia Pacific. More information about Kmart is available on the World Wide Web at http://www.bluelight.com/ under the "About Kmart" section.

SOURCE: Kmart Corporation

Contact: Mary Lorencz, Director, Corporate Media Relations of Kmart
Corporation, 248-463-2705

Website: http://www.bluelight.com/