Troy, Michigan, Nov. 16 (Bloomberg) -- Kmart Corp. unveiled a Web site selling music compact discs and cassettes, in another step by the second-largest U.S. discount retailer to sell more goods over the Internet.
Troy, Michigan-based Kmart began selling products on the Web in May and now offers online shoppers household products, health and fitness goods such as vitamins, and weekly promotional items.
The company faces a crowded market in the online music arena. Stiff competition recently led online music merchants CDnow Inc. and N2K Inc. to agree to merge. Other companies selling music on the Internet include booksellers Amazon.com Inc. and Barnes & Noble Inc., as well as traditional music sellers Tower Records and K-Tel International Inc.
''I say 'good luck,''' said Nicole Vanderbilt, an analyst at market researcher Jupiter Communications. ''That's going to be a really hard business for them to gain market share in.''
Many other companies have found it difficult to make money selling music online. Because of deep discounting and aggressive marketing to attract Internet users, online music merchants face margins that hover around 15 percent, Vanderbilt said.
Kmart owned book and music merchant Borders Group Inc. before spinning it off in 1995.
Kmart, which had fiscal 1998 revenue of $32.2 billion, said it will sell more than 100,000 music titles on its Web site. The company declined to say how much revenue comes from the site.
Kmart's shares rose 9/16 to 16 5/16 in midday trading.
12:15:40 11/16/1998
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