Kmart Corp.

Author:Ed Dinger, William Baue, Rayna Bailey, Sharyn Kolberg, Rayna Bailey

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3100 West Big Beaver Road

Troy, Michigan 48084


Telephone: (248) 463-1000

Web site:


Joe Boxer built its reputation in the underwear field by being offbeat. It was the first to offer glow-in-the-dark boxers and was known to stage outrageous stunts, such as sending 100 pairs of underwear to President Bill Clinton in 1993 to mark his first 100 days in office. The accompanying note read, "If you're going to change the country, you've got to change your underwear." But Joe Boxer was sold in department stores, where it had to fight for shelf space, and saw sales drop off as consumers began opting to shop at specialty stores. In 2001 the company was sold and the new owner soon struck an exclusive deal with Kmart. Although Kmart was the second largest retailer in the United States, it could not hope to compete on price with the top retailer, Wal-Mart, and had attempted to carve out a place in the market by creating celebrity brands, such as the Martha Stewart line of products. Joe Boxer was the first major department store brand to make the switch to Kmart, and its launch took on even greater importance for Kmart, which in the meantime had to file for Chapter 11 bankruptcy protection and contend with the uncertainty of the future of Martha Stewart, who was involved in an insider stock trading scandal that ultimately led to her imprisonment. Thus the Joe Boxer launch not only sought to introduce Joe Boxer's expanded line of apparel and other lifestyle products but also hoped to infuse some energy into Kmart, sorely in need of a spark.

The Joe Boxer kickoff was part of a larger back-to-school effort in the summer of 2002. Developed by ad agency TBWA\Chiat\Day, it consisted of the usual oddball promotional stunts, such as shooting people wearing Joe Boxer clothes out of a cannon, as well as a special pullout section in Kmart's weekly advertising circular, mailed to 10 million people. The core of the campaign, however, was the television spots, and one in particular, "Vaughn," grabbed the spotlight. In it a muscular young African-American man happily danced his Boxer Boogie, wearing nothing more than a pair of white boxers and a toothy smile. The pure joy of his routine won over viewers, and the dancer, Vaughn Lowery, not only received his 15 minutes of fame, making television appearances and becoming the object of press interviews, but also provided Joe Boxer and Kmart with some much appreciated attention and momentum.

The Joe Boxer launch only lasted through August 2002 and the end of the back-to-school sales push, but it resulted in an immediate surge for Joe Boxer products. The emergence of Lowery as the Boxer Guy also set the stage for a pair of equally popular holiday ads and an elaborate dance-number TV spot that was part of the 2003 back-to-school campaign, which also marked the one-year anniversary of the Joe Boxer launch. The brand, in spite of its solid start, began to lose its place with Kmart, which emerged from bankruptcy and was

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swallowed up by Sears. The company subsequently began deemphasizing Joe Boxer, seen as little more than a men's underwear and women's intimates brand.


In 2001 a struggling retailer, Kmart, and a struggling underwear maker, Joe Boxer, joined forces in an effort to reverse their fortunes. The latter, established in 1985 to make novelty ties, had made its mark with its irreverent, wacky approach to boxer shorts, including the Imperial Hoser, a red tartan boxer with a detachable raccoon tail; boxers with a $100 bill silk-screened on them; and the industry's first glow-in-the-dark underwear. The company branched into loungewear and sleepwear for men and women and enjoyed strong growth during the 1990s, supported by unusual, attention-grabbing marketing efforts, such as the first-ever in-flight underwear fashion show. The brand took steps toward becoming a lifestyle brand, introducing a licensed Timex watch, for example, but Joe Boxer focused on department stores—including Saks Inc., Marshall Field's, Dillard's, May Department Stores, and Federated Department Stores—where it never received the shelf space the company wanted. More importantly, target customers began turning to specialty stores, a move that had an adverse impact on Joe Boxer's sales. In 2001 Joe Boxer was acquired by apparel holding company Windsong Allegiance Group, LLC. A short time later the company signed a long-term, exclusive agreement with Kmart. It was a down-market move for a major department store brand, but it gave Joe Boxer an opportunity to launch new lines of home and apparel products, as well as a chance to reintroduce the brand in a major marketing campaign with the resources of America's second largest retailer behind it.

For years Kmart had done well creating a series of exclusive brands—including Disney, Sesame Street, Kathy Ireland, Jaclyn Smith, and Martha Stewart—to drive sales. With Stewart in legal trouble because of insider stock trading charges, Kmart was eager to lure its first major department store brand in Joe Boxer, which also appealed to a younger customer. The retailer planned to promote the Joe Boxer-exclusive with a back-to-school campaign, but before that could take place Kmart was forced to file for Chapter 11 bankruptcy protection. Nevertheless the company pressed ahead with its plans for Joe Boxer, the launch of which took on even greater importance as Kmart more than ever needed something to change the topic away from finances and Martha Stewart and bring some energy to the business.


The target customer for Kmart was a married woman, 35 to 45 years old, with children. The retailer's top brand, Martha Stewart, was also skewed toward older women. What made the addition of Joe Boxer so appealing to Kmart was that it targeted a younger demographic, the 14- to 34-year-old age range, and appealed to both women and men. As an exclusive Kmart brand, the Joe Boxer product lines were greatly expanded beyond underwear and sleepwear, practically infiltrating every department in the store. The brand was applied to all manner of apparel, from infant clothing to jackets and jeans, as well as shoes, jewelry, clocks, and picture frames. Given that the Joe Boxer launch was tied in with a back-to-school push, the target audience of the campaign was expanded to include the wider family market.


As a department store underwear and sleepwear brand, Joe Boxer competed against the likes of Calvin Klein, Ralph Lauren, and Donna Karan—all of which possessed greater clout in terms of brand recognition and financial resources. The move to Kmart put Joe Boxer in competition with down-market underwear brands, like Fruit of the Loom and Jockey International, and with other mass merchants, like Wal-Mart and Target. But the expansion into other product categories turned Joe Boxer into a lifestyle brand. Because of its iconoclastic, somewhat irreverent approach, Joe Boxer had carved out a unique niche and lacked any direct competitor, other than companies with competing lifestyle visions, such as Calvin Klein, Ralph Lauren, and other designers.


Vaughn Lowery, the Boxer Guy who gained sudden popularity dancing in his boxer shorts in a 15-second ad for the Joe Boxer launch with Kmart, was born in Detroit in modest circumstances. Although his family lived in a federally subsidized housing community, he grew up with a strong desire to go to college. He graduated from Cornell University with a degree in labor relations. He also wanted to pursue acting, and with that in mind he moved to Los Angeles two years before landing his first Joe Boxer commercial.


In July 2002 the campaign to introduce the Joe Boxer brand to Kmart was kicked off in typical Joe Boxer fashion. Two men dressed in Joe Boxer clothes and underwear were shot from a cannon in the parking lot

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of a Detroit Kmart store. "We definitely needed to get out there with the message of what you'd expect from Joe Boxer is still there, and now it's at Kmart," Kmart marketing executive Steven Feuling told Sherri Day of the New York Times. A few days later a round of four television commercials, developed by TBWA\Chiat\Day, were unveiled. Kmart also used its weekly advertising circular, sent to more than 10 million households, to promote the brand. An eight-page pullout featured Joe Boxer merchandise. Also in keeping with the brand's fun promotional events, Joe Boxer held a fashion show later in July on the escalator of the Astor Place Kmart store located in New York's Greenwich Village. Joe Boxer's founder, Nick Graham, riding on the back of a convertible, headed a parade that included the New York Police Department pipe and drum band. Graham then hosted the fashion show that featured teens modeling back-to-school apparel and presided over a mock wedding of Joe Boxer and a woman representing Kmart. "Do you, Joe, take this woman as your wife, even though she has 1,800 stores and gets around a lot?" he asked.

The centerpiece of the campaign, however, was the four 15-second TV spots, which focused on Joe Boxer's core underwear and clothing items. With the younger demographic in mind, the spots relied on an upbeat, bossa nova music track and featured...

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