You are here
CHICAGO - Discount retailer Kmart Corp. said on Tuesday its board approved the closure of 326 of its 1,800 stores in hopes of emerging from bankruptcy as soon as April 30. The retailer also said it would cut as many as 37,000 jobs.
The closings include 266 Kmart and Big Kmart stores and 60 Kmart SuperCenters, which include grocery stores.
Texas was hardest hit -- losing 54 stores on top of the 33 closed last year. Kmart is now giving up on entire markets in the Lone Star state, among them Dallas and Ft. Worth, Houston and Galveston, Amarillo and Austin. A distribution center in Corsicanais, Texas is also set to be shut. Kmart is also leaving Alaska entirely.
Kmart aims to file the plan with the bankruptcy court in Chicago on Jan. 24.
Kmart said it would record a total of $1.7 billion in restructuring charges from the closings. The bulk of the charges will be taken in the fourth quarter of 2002, with the rest in 2003.
The store closings and job cuts come the same day that Kmart posted its first monthly profit since filing for Chapter 11 bankruptcy protection. Kmart posted a profit of $349 million in December, though it said sales at stores open at least a year fell 5.7 percent for the month.
James Adamson, Kmart's chairman and chief executive, said Tuesday's cost cutting was extremely painful but necessary to pull the century-old retailer out of bankruptcy and make it a "stronger and healthier company."
However, analysts remain skeptical about Kmart's ability to compete with other large discounters such as Wal-Mart and Target for the long term.
Kmart closed 283 stores in 2002.