Kmart Corp. (Troy, Mich.) has announced that for the 13-week quarter ended Oct. 31, 2001, net sales dropped 2.2 percent from a year ago and same-store sales decreased 1.5 percent.
“We continue to work at fixing our core business by being in-stock, pricing competitively and providing an excellent shopping experience for Kmart customers,” said chairman and ceo Chuck Conaway. “We have made considerable progress in all of these areas but have a lot more work to do.
“During this past quarter,” he continued, “we completed all of our store resets, launched BlueLight Always everyday low pricing for our frequency categories and installed self-checkout registers in more than 1000 stores,”
Selling, general and administrative expense was 21.6 percent of sales in the quarter versus 20.8 percent in the same quarter in 2000. The company said the increase was due primarily to additional investment in store labor that Kmart committed to last year to enhance customer service.
During the third quarter, the retailer opened two supercenters and two discount stores, closed four discount stores and converted 10 discount stores into supercenters. As of October 31, Kmart operated 2113 stores – 50 less than last year.
Conaway, at the time he was hired in May 2000, promised a turnaround. In September 2000, he set a two-year timetable for himself.
Standard & Poor's lowered the retailer's credit rating another notch below investment grade, to BB from BB+. Kmart was last at the BB rating in March 1999. “We had expected to see good improvement in operations as well as in credit measures,” said an S&P spokesperson.