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Kmart Agrees to Take American Express Cards

October 26, 1992

NEW YORK (AP) _ The home of the blue light special will start taking the cards often touted as the way to pay for swanky rounds of golf, expensive restaurants and supersonic jet travel.

Kmart has agreed to begin taking the American Express Card at nearly all its 2,400 stores nationwide by spring, the companies said Monday.

Troy, Mich.-based retailer, which has moved into second place in sales behind industry leader Wal-Mart, has been making a concerted effort to update the way it presents merchandise.

Joseph E. Antonini, chairman, chief executive and president of Kmart Corp., said the deal should help ″attract many new customers who appreciate the quality, service and value that today’s Kmart offers.″

Spokeswoman Mary Lorencz said Kmart decided to take American Express nationally after testing it for nearly a year at 154 stores in Ohio and Southern Calfornia. ″A large segment of Kmart customers were interested in using American Express Cards in our stores,″ she said.

American Express Co. said the move to link up with Kmart followed periodic surveys that indicated that is a place where card members want to shop.

″Our cardmembers are smart, value-oriented shoppers who want high quality goods and services at the best possible prices,″ American Express’ chairman and chief execueive, James Robinson III, said in a statement.

Marcos Rada, a spokesman for American Express, disputed the suggestion that forging a tie with a discount retailer is at odds with the affluent image that American Express has tried to promote.

″Their acceptance helps our image because this is where they want to use it,″ he said.

The disclosure of the agreement between Kmart and American Express comes in the wake of American Express’ unrelated dismissal of its advertising agency Chiat-Day Mojo, which specialized in ads linking the cards and affluence.

Chiat’s ads over the past 11 months showed the American Express card unexpectedly appearing as part of the landscape on a golf course, popping up amid skyscrapers in New York and adorning the tail of the Concorde jet.

Critics found the ads snobbish and outdated.

Chiat had recently prepared a wave of new ads using the same approach, but the financial services company decided to use ads created by the agency Chiat displaced last November, Ogilvy & Mather.

Ogilvy had stayed on as the agency responsible for creating American Express card ads aimed at merchants after being dismissed from the $60 million consumer ad assignment.

Its ads, which began running in select markets two months ago, feature testimonials for the card from people like toy retailer Charles Lazarus and New Orleans restaurant owner Ellen Brennan.

Those ads scored well in tests with consumers as well as with retailers, said American Express spokeswoman Gail Wasserman.

″We are defined by the company we keep,″ she said. ’We decided to take that campaign national.″

American Express’ Rada said the deal with Kmart and the dismissal of the ad agency were unrelated. ″It is a coincidence,″ he said.

The American Express card is already honored at several other chains owned by Kmart Corp., including Builders Square, PayLess Drug Stores and Waldenbooks.

American Express said its cards are taken at more than 3.6 million establishments worldwide.

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