DETROIT (AP) _ Kmart Corp.'s chief executive, Chuck Conaway, left the struggling discount chain on Monday, three days after the company announced it was closing 284 stores and cutting 22,000 jobs.
James Adamson, chairman of the board, will replace Conaway as head of the bankrupt retailer, effective immediately. Adamson is a longtime Kmart board member and a turnaround expert.
Kmart filed for Chapter 11 bankruptcy protection on Jan. 22, following lower-than-expected holiday sales, downgrades by several credit rating agencies and a stock dive.
``While I have been contemplating this departure for some time given my family needs and professional goals, it was critical that the transition go smoothly,'' Conaway said in a statement.
Conaway was replaced as Kmart chairman by Adamson days before the bankruptcy filing. He signed a five-year contract with Kmart in May 2000, replacing Floyd Hall.
In an agreement Conaway made with Kmart following the bankruptcy filing, the company is to forgive a $5 million loan it made to him last year.
The agreement also called for him to receive $6.5 million on July 31, 2003, or sooner if he was fired.
Conaway won many fans on Wall Street as the No. 2 executive at Woonsocket, R.I.-based CVS, where he helped build the drugstore chain into an industry powerhouse with more than 4,100 stores and annual sales topping $18 billion.
Under his watch, CVS developed its Internet strategy. He also oversaw the drugstore chain's distribution systems _ getting products from suppliers into its stores.
At the time he was named Kmart CEO, analysts said one shortcoming was Conaway's lack of experience in fashion. Kmart has struggled to keep pace with retail chains like Old Navy that offer trendier items.
Kmart, the No. 3 discount retailer, long has struggled to compete with lower priced Wal-Mart Stores Inc., and more fashionable Target Corp.
Prior to the Chapter 11 filing, Conaway closed unproductive stores, reintroduced the BlueLight Special, and made other changes to help the discount retailer become more productive and more efficient.
Among Conaway's initiatives: Kmart said it would replace two aging distribution centers with two modern facilities and would overhaul its product-delivery software in an effort to improve the flow of goods to its stores. Kmart has been criticized for having understocked stores.
The BlueLight Special returned to Kmart in April 2001 under Conaway's watch. The marketing tool, first introduced in 1965 and retired in the 1990s, offers customers lowered everyday prices on more than 30,000 items.