Kmart Corp. (Troy, Mich.) took another step away from the Big Three discount mass merchants when it refused to report its January sales on a day its one-time arch-rivals reported theirs.
Wal-Mart (Bentonville, Ark.) reported an 8.6 percent same-store sales increase at its Wal-Mart stores for the month and a 7 percent increase at Sam's Club locations. Target Corp. (Minneapolis) said that January same-store sales grew 7.6 percent at its Target stores.
But Kmart, which cited poor holiday sales as part of the reason it filed for Chapter 11 bankruptcy protection on Jan. 22, 2002, said it will not report its sales with the rest of the industry during its bankruptcy reorganization.
“In light of Kmart's Chapter 11 filing,” said a company spokesman, “we will be complying with the financial reporting requirements of the bankruptcy code and begin filing monthly operating statements with the bankruptcy court starting around the end of March.” The company reiterated that it plans to emerge from bankruptcy by July 2003.
While it continues operation under Chapter 11, Kmart said it is evaluating the performance and lease of every store and that “it will be closing a number of stores,” though the exact number and locations have not yet been determined. The evaluation and announcement are expected to be complete by the end of Kmart's first quarter.
Wal-Mart has joined Kmart in bankruptcy court, asking for assurance that Kmart doesn't cancel leases to stores Wal-Mart picked up in 1993 from Kmart. Kmart received court approval to shed more than 350 leases for closed locations, a move that should save the retailer roughly $250 million a year. The properties were once home to Kmart stores or Kmart affiliates such as Pace Membership Warehouse Inc. and Sports Authority. Wal-Mart officials said in their brief that they believe leases for Pace properties, which the retailer bought and converted to Sam's Club stores, are among the rejection list approved by the bankruptcy judge, according to documents filed with the bankruptcy court.
Last week, Kmart restructured its field organization to provide “clear direction and strong leadership” to its 2114 stores by trimming its field organization to five divisions (West, Southeast, Northeast, International and Super Centers) from six and naming Gregg Treadway executive vp for store operations. Treadway will oversee the five divisions and report directly to ceo Chuck Conaway.
David Montoya, formerly executive vp for store operations, was reassigned and will now oversee Kmart's specialty business interests, including restaurant operations and One-Hour Photo.