DALLAS, Aug 21, 2002/ FW/ --- Kmart has all bases loaded in its continued effort to extracate itself from Chapter 11.

Last month, it launched Joe Boxer as an exclusive brand to attract more customers.

The popular JOE BOXER brand which offers something for everyone in the family with products for the home (bedroom and beyond) and apparel (more than just boxer shorts) for men, women, girls, boys, infants and toddlers is expected to bring more traffic to the Kmart stores.

Early this month, the company hired Richard L. (Dick) King of Encore Associates, Inc., as General Merchandise Manager, Food and Consumables to oversee the food and consumables merchandising functions.

Kmart has even filed for a motion with the U.S. Bankruptcy Court for the Northern District of Illinois seeking to amend the Company's $2 billion debtor-in-possession ("DIP") credit facility which will allow the company to exceed its DIP in amount to be designated later, but not to exceed $500 million.

All of these efforts were too late though to save 450 jobs.

400 positions at the company's Troy, Michigan headquarters have been eliminated, as well as 50 additional jobs across the country.

Also, 100 open positions are now non-starters and about 130 contract positions are being phased out.

"This cost reduction initiative is absolutely critical to our reorganization," said Chairman and CEO James Adamson. "We had no alternative but to take this action as the company continues to take the steps necessary to return to financial health and regain the confidence of its many stakeholders."

"These decisions were not made lightly and we are committed to treating our associates with dignity and respect through this difficult process," he added.

The new cost reduction plan will save the company $66 million for the 2002 fiscal year and $130 million annually, while costing about $15 million in severance pay.