Not surprisingly, Kmart's plummeting sales fell even more in the month after it filed for Chapter 11 bankruptcy protection.
The biggest retailer ever to declare bankruptcy lost $753 million in the five weeks following Jan. 22, 2002. This was the Troy, Mich.-based retailer's first announcement of financial details since it underwent reorganization.
Same-store sales, which had declined 0.1 percent in January, plunged 11 percent in February. In contrast, same-store sales for Kmart's major competitors rose 10 percent at Wal-Mart (Bentonville, Ark.) and 8.5 percent at Target (Minneapolis).
“They had a loss because their shelves were empty,” declared one industry observer. “When their suppliers cut them off, some of their stores were half-empty. When that happens, customers leave in frustration.”
Kmart's attempts to climb back to profitability have begun with a new ad campaign using the slogan, “Kmart. The Stuff of Life,” an effort to redefine its image as a place where mothers can find the products they need.