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TROY, Mich. (PRNewswire-FirstCall)--Kmart Corp. today reaffirmed its commitment to a "fast-track reorganization" with the objective of emerging from Chapter 11 court protection by July. Kmart also reported that its comparable-store sales trend improved significantly in September and the first half of October, aided by successful promotions and store initiatives.
Under a timeline reviewed last week with its board of directors and the three independent statutory committees in its Chapter 11 reorganization case, Kmart expects to complete a comprehensive five-year business plan by year-end. Thereafter, the company intends to file a proposed plan of reorganization and disclosure statement with the U.S. Bankruptcy Court for the Northern District of Illinois on or before Feb. 24. As previously reported, the court has extended the period in which Kmart has the exclusive right to file a plan of reorganization through Feb. 28.
"We have provided a timeline to our board and statutory committees that provides for Kmart to emerge from Chapter 11 protection as early as the first half of 2003," said James B. Adamson, Kmart chairman and chief executive officer. "This timeline is aggressive and will require a lot of hard work in a relatively short period of time, but should be doable."
In its monthly operating report for the four weeks ended Sept. 25, which was filed today with the court and the Securities and Exchange Commission, Kmart reported that its comparable-store sales in September declined 6.9 percent from the same period a year ago. This represents an improvement of five percentage points from Kmart's comparable store sales in August. Since its Chapter 11 filing in January 2002, Kmart's monthly comparable store sales decline has averaged approximately 11 percent.
"We have been very pleased with the company's recent same-store sales trend, which is showing continued improvement in the first half of October," said Julian Day, Kmart president and chief operating officer. "We believe the improved trend has been aided by the success of our 'Have To Have It' promotions in the Chicago and Detroit markets and by the progress we have made in staying in-stock in high volume and advertised merchandise. "
In a recent test in the Chicago market, managers at 10 Kmart stores were given more autonomy to order and replenish high-volume merchandise, as well as merchandise featured in the company's weekly sales circulars. Sales at these stores were approximately 10 to 12 percent better than the chain during the test period, with better inventory turns and margins than the company average.