OK? Or KO?

The favorite retail parlor game in the lull between Christmas and Presidents'Day was: What will Kmart do?

The biggest retail bankruptcy ever was probably a long time in coming. One of the best encapsulations of Kmart's problems at the end was: “If you make $65,000, you shop at Target. If you make $35,000, you shop at Wal-Mart. There's no market in there for Kmart.”

Not even in its Motown backyard, evidently. Back in February, I was interviewed by a reporter from the Detroit Free Press, who had toured the three retailers'area stores with store designer Tony Camilletti of JGA Inc.

Camilletti noted Kmart's fractured theme and inability to make a statement about its image. And he expressed disappointment that Kmart failed to capitalize on its brands – Route 66, Disney, Sesame Street, Kathy Ireland, Martha Stewart and Jaclyn Smith – with graphics, posters and signs throughout the store, a move that would bring coherence to Kmart's products.

“They all sell pretty much the same thing,” the writer told me, “but Target seems trendier. Wal-Mart is cheaper. And Kmart looked tired.”

Tired, burdened with debt and in danger of losing its key suppliers, Kmart tossed in the towel in January. But it defiantly insisted that it would reorganize and be out of bankruptcy by 2003. Or maybe 2004.

Will it? And what should it do? Chain Store Age raised the question on its web site, and the respondents were as perplexed as everyone else: 20 percent said “close at least 500 stores”; 12 percent said “more heavily promote exclusive brands”; 10 percent said “expand urban presence and minority focus”; 17 percent said “concentrate on supercenter format”; 29 percent said “all of the above”; and 12 percent said “give up.”

Kmart seems equally confused. Right after filing, Kmart executives speculated that they'd probably get out of a whole bunch of lousy leases and close 500 of their 2100 stores. Then James Adamson, the outside director and turnaround expert chosen to head the board, said Kmart wouldn't be closing any of its stores. Then they told the judge that yes, they would – but just 284 to start with.

Adamson is being called “a man who loves a challenge.” He learned retailing by working in Target stores, among others. He's an Army brat described as “tough… take-charge… charismatic… works out every day.”

Reports out of the Detroit area are that local customers and businesses are rallying around their beleaguered Big Beaver Road neighbor, writing letters, sending e-mails, making public pleas to shoppers to support Kmart. Restaurants are offering 10 percent discounts with Kmart sales receipts. Employers are giving their employees Kmart gift cards. Radio stations are making public service announcements. And a local outdoor advertising company has given Kmart the use of 10 billboards to help the company get its message out. The message is: “We're Making a YOU Turn.”

One would hope Adamson has met previous challenges with more than billboard campaigns.

And what about Martha Stewart? Would she stand by her man? She spent January equivocating, which made me think of the Groucho Marx song from “Animal Crackers” – “Hello, I must be going. I'll do anything you say, in fact I'll even stay! I'm glad I came, but just the same, I must be going.”