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CHICAGO - A bankruptcy judge on Wednesday approved Kmart's request to close more than 280 stores across the country, giving the discount retailer clearance to begin going-out-of-business sales in those stores, The Associated Press reports. The sales could start as early as today.
The move is expected to generate more than $500 million for Kmart, according to the AP. With that money, Kmart plans to focus on its stores that will remain open.
Not everything in the stores will be discounted, the AP reports. Guns and ammunition will be returned to their vendors and tobacco and alcohol will be sold at normal prices.
Kmart will use the sale proceeds to pay for the costs of the sale, including paying employees, advertising costs and employee bonuses. Those employees who stay during the liquidation will get bonuses of up to 15 percent of their base pay, according to the AP.
Kmart has said it expects the savings from store closings to be about $45 million annually after this year.
Seven companies will work together to run the liquidation: SB Capital Group LLC, the Nassi Group LLC, Buxbaum Group, Gordon Brothers Retail Partners LLC, Hilco Merchant Resources LLC and Great American Group.
Also on Wednesday, the bankruptcy judge approved Kmart's request to continue its licensing agreements and pay outstanding accounts with its five major brands: Martha Stewart Living Omnimedia Inc., Disney Enterprises Inc., G.H. Productions Inc., which supplies its Jaclyn Smith line, Joe Boxer Licensing LLC, and Kathy Ireland World Wide LLC.
Kmart said in court Wednesday that the five brands account for roughly $2.7 billion annually in gross sales.
The judge approved Kmart's motion to get out of its NASCAR sponsorship agreement with Haas-Carter Motorsports.
At an April 24 hearing, the judge will address employment agreements with Kmart's new executives and separation agreements with former CEO Chuck Conaway.