Kmart ex­pands lay­away plan

The dis­count chain of­fers more op­tions as it an­tic­i­pates an­other tough hol­i­day sea­son.

Los Angeles Times - - Business - An­drea Chang

The re­tailer of­fers more op­tions as it ex­pects an­other tough hol­i­day sea­son.

Kmart, which heav­ily pro­moted its lay­away op­tions dur­ing the last two hol­i­day sea­sons, is ex­pand­ing the pro­gram in an­tic­i­pa­tion of an­other tough Christ­mas.

The ex­tended lay­away pro­gram al­lows cus­tomers to se­lect their items and make bi­weekly pay­ments over 10 to 12 weeks, an in­crease from eight weeks; items are picked up af­ter they’ve been paid in full.

The dis­count chain is also mak­ing more items el­i­gi­ble to be placed on lay­away, such as wash­ers, dry­ers and other big-ticket items.

“For us, it is an op­por­tu­nity to con­tinue to demon­strate an un­der­stand­ing of the hard times and give cus­tomers some ex­tra so­lu­tions as they go into the hol­i­day sea­son,” Chief Mar­ket­ing Of­fi­cer Mark Sny­der said.

Lay­away has made a come­back dur­ing the eco­nomic down­turn as con­sumers look to bud­get their Christ­mas shop­ping, a shift from the buy-now-pay-later men­tal­ity of credit cards.

Un­like credit cards, lay­away plans typ­i­cally carry no in­ter­est charge. Most stores re­quire a small de­posit or flat fee up­front and place some re­stric­tions on what can be put on lay­away, such as per­ish­ables and clear­ance items. A typ­i­cal lay­away term ranges from a few weeks to a few months.

With con­sumers still ex­pected to spend care­fully for the hol­i­days, Kmart is ex­pect­ing a com­pet­i­tive re­tail en­vi­ron­ment and is ag­gres­sively work­ing to gain mar­ket share, Sny­der said.

To that end, Kmart stores will again be open on Thanks­giv­ing, which the com­pany hopes will give it an edge over com­peti­tors who are closed on the hol­i­day. And on the day af­ter Thanks­giv­ing, the stores will open their doors an hour ear­lier, at 5 a.m., for the an­nual shop­ping ex­trav­a­ganza known as Black Fri­day.

“There’s not a lot of good news or ev­i­dence out there that the hol­i­day sea­son is go­ing to be very dif­fer­ent in cus­tomer be­hav­ior com­pared with past sea­sons,” Sny­der said. “Things are go­ing to re­main pretty tough.”


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