Kmart Formulates Store-Closing Plan

Kmart Corp. (Troy, Mich.), the discount mass-merchant now operating under Chapter 11 bankruptcy protection, has told a federal bankruptcy judge that it plans to close perhaps 300 stores.

It said it will offer a list of those stores by March 11, 2002, but a report in the Detroit Free Press showed a list, from an undisclosed source, of 291 stores to be closed. Kmart disputed the information on the list, insisting that no decisions had yet been made about how many or which stores would be closed.

The retailer, which operated 2114 stores at the time of its January bankruptcy filing, said it expects to save about $250 million a year from the closings. It said it plans to hire a liquidator to sell off the contents of the closed stores.

“Prompt execution of the store-closings at this time is critical, given that the first quarter his historically a time of significant cash drain,” Kmart said in its court documents. “Any delay will only lead to continued operational losses for these closing stores.”

The judge is scheduled to rule on Kmart's request at a March 6 hearing.

In the meantime, larger and more successful rival Wal-Mart (Bentonville, Ark.) continues to thrive. The retailer's quarterly profits jumped 9.2 percent, thanks at least in part to the migration of Kmart customers to its stores. Wal-Mart has forecast a 16 percent to 17 percent jump in this year's profits (it had been averaging 15 percent annual growth), another probable boost from migrating Kmart customers.

Wal-Mart became the world's largest company in terms of sales after reporting annual sales of $217.8 billion, topping Exxon Mobil's $212.9 billion.