Kmart Corporation (NYSE: KM) today announced Leaders in Learning, an aggressive new corporate giving and community outreach initiative that focuses all of the company's community-based resources to support diverse education programs and promote lifelong learning. Kmart donates more than $35 million to community organizations each year.

Under the Leaders in Learning umbrella, new and existing corporate giving efforts -- including partnerships, corporate grants, local donations, community relations, matching gifts, and executive involvement -- will be directed to programs that support traditional and non-traditional learning initiatives in communities served by Kmart.

"Kmart has a long history of giving back to the communities where we have stores, and as the Authority for Moms, Home and Kids, we are committed to providing products and services that meet the needs and enhance the quality of life for our customers," said Charles C. Conaway, Chairman and CEO of Kmart Corporation.

Conaway added, "As the foundation of our community-based initiatives, Leaders in Learning demonstrates our desire to bring opportunities to our customers, communities, partners and associates that expand on their knowledge, help in their everyday lives, and provide leadership roles for our extended Kmart family."

$10 Million Earmarked for Schools in First New Initiative

The Kmart School Spirit program, a significant new national fundraising program for K-12 schools, also was announced today as the first new initiative under the Leaders in Learning umbrella.

Customers need only to enroll in the program, specify the school to receive donations, and use a special School Spirit card when shopping at Kmart. With each purchase at any Kmart store, the company will donate a portion* of all eligible** purchases to the customer's school of choice.

Through the School Spirit program, Kmart will donate a minimum of $10 million to schools throughout the United States, Puerto Rico, the U.S. Virgin Islands and Guam in the 2001-2002 school year.

"As public funding for education has decreased, schools are looking for new ways to raise money just to keep the basic programs going," said Conaway. "Kmart is proud to do its part to further the education of our children, and to give back to the communities where our customers and employees live and work."

Kmart's School Spirit program provides greater flexibility to raise more dollars for schools since customers can pay for their purchases by cash, check or credit card. Additionally, customers shopping at any Kmart store can designate a Kmart School Spirit donation to an out-of-town school, making it possible for relatives and friends living elsewhere to raise money for a specific school in another location.

Another unique aspect of School Spirit is the fact that Kmart shoppers with children in multiple schools can enroll for multiple cards and direct donations to the corresponding schools.

"This program can easily result in significant extra funding for each school," said Conaway. "It is designed to be hassle-free for parents, students and schools, making participation easy for everyone. The more a School Spirit card is used, the more money a school earns."

Participating schools will receive checks from Kmart twice a year, beginning in Spring 2002.

Beginning July 28, customers can enroll and immediately receive cards for the School Spirit program at the Customer Service Desk of Kmart's more than 2,100 stores or enroll online at www.bluelight.com and School Spirit cards will be mailed directly to the customer.

To let educators know about the School Spirit program, Kmart has sent enrollment materials to hundreds of thousands of school principals in the U.S., Puerto Rico, the U.S. Virgin Islands, and Guam. Additionally, PTA presidents throughout the nation will be notified and asked to encourage their schools to participate.

A direct mail piece containing a School Spirit enrollment form will be distributed July 28 and a July 29 national advertising circular will promote the program.

"School Spirit, along with the entire Leaders in Learning initiative, will be a winning proposition for schools, communities, customers and, most importantly, children," Conaway said. "And, in conjunction with the peak back-to-school shopping period, Kmart will double our donation amount on all eligible purchases made between July 28 and September 1."

Kmart Corporation is a near-$40 billion company that serves America with more than 2,100 Kmart and Kmart Supercenter retail outlets. Kmart donates $35 million each year to support its hometowns and local nonprofit organizations. Kmart associates also provide their most valuable resource - time - every day in their local communities. In addition to serving all 50 states, Kmart operations extend to the Caribbean Islands and Asia Pacific. More information about Kmart is available on the World Wide Web at www.bluelight.com under the "About Kmart" section.

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