This is a partial transcript from Your World with Neil Cavuto, March 11, 2002. Click here for complete access to all of Neil Cavuto's CEO interviews.
BRENDA BUTTNER, GUEST HOST: Bankrupt Kmart (KM) shaking up its top management. CEO Charles Conaway has resigned. He'll be replaced by chairman James Adamson.
And Mr. Adamson joins us now from company headquarters in Troy, Michigan. Sir, thanks so much for joining us.
JAMES ADAMSON, CHAIRMAN & CEO, KMART: Oh, my pleasure. Thank you.
BUTTNER: So he was at the helm when the company goes bankrupt. The stock slides and the debt is downgraded. Was he fired?
ADAMSON: No. It was a mutual agreement between the board and Chuck Conaway. And reality is, he felt that it was the best for the company to have a change in leadership and best for him personally. So, to me, I look at it as a win-win. Now I have got to take the reigns and do what I can to help get this company out of bankruptcy.
BUTTNER: The company has to forgive a $5 million loan it made to him, is that correct as part of an agreement?
ADAMSON: That is part of the agreement, that we would forgive that loan. Yes.
BUTTNER: Something it can ill afford right now?
ADAMSON: Well, anything that costs money right now you would rather be directed at the employees in the store and capital, et cetera, to fix our stores up. But you have also got to treat people fairly and with dignity, no matter what level they are in the organization.
BUTTNER: His policy was to reduce prices. Clearly it did not work. What are you going to do?
ADAMSON: Well, you know, the prices they reduced, there was a strategy behind that which was to reduce inventory through the supply chain and to rely less on circulars. Unfortunately, this company's Sunday supplements, as we call them, are a strength of Kmart.
And price, you do not win the customer on price alone. A competitor of ours have done a pretty good job with that. But we've got to holistically take a look at our urban markets, our brand partners like Martha Stewart, Sesame Street, Route 66, Disney, Joe Boxer, to take a look at all those issues. And the most important thing is to put in place policies that allow our store managers and our associates to make decisions and make the experience in the store the best possible for our customers.
ADAMSON: Well, yes. Clearly, we have tough competitors. But, you know, Kmart has been around 103 years. There is definitely room for Kmart. And we have seen such an outcry of support for Kmart, please save my Kmart, do not close my Kmart, please do what is right. So you survive through this. And we are getting a lot of support from our vendors, from our employees. And so I am confident we can bring this company through bankruptcy. It is just a matter of in what shape we come out and how long.
BUTTNER: And when do you think you will be out of bankruptcy?
ADAMSON: Well, I would like to get out tomorrow, to be honest with you. But the reality is some time next year, if we do what is right for this company and start producing results and having a plan that makes sense to our constituents, the possibility is we could come out next year.
BUTTNER: And your shares traded a little bit more than a buck a share. They're down some 76 percent so far this year. Expect that to turn around?
ADAMSON: Well, you never know. You know, when you are a bankrupt company, your shares are speculative. I mean, I would love them to go back up, being a shareholder myself. But the reality is we have got to focus in on the business producing cash and getting through this bankruptcy, and it will determine what the equity value is that is left at the end of the bankruptcy process.
BUTTNER: All right. James Adamson, the new CEO at Kmart, good luck to you.
ADAMSON: Thank you. I need all that. Thank you very much.
Content and Programming Copyright 2002 Fox News Network, Inc. ALL RIGHTS RESERVED. Transcription Copyright 2002 eMediaMillWorks, Inc. (f/k/a Federal Document Clearing House, Inc.), which takes sole responsibility for the accuracy of the transcription. ALL RIGHTS RESERVED. No license is granted to the user of this material except for the user's personal or internal use and, in such case, only one copy may be printed, nor shall user use any material for commercial purposes or in any fashion that may infringe upon Fox News Network, Inc.'s and eMediaMillWorks, Inc.'s copyrights or other proprietary rights or interests in the material. This is not a legal transcript for purposes of litigation.