Is it time to close Kmart?

The chain is losing money, and sales are sliding. Is there any reason for it to stay in business?

By Kim Peterson Jan 24, 2013 6:28PM
Pedestrians pass a Kmart location in New York ( Frank Franklin II/AP Photo)Sears Holdings (SHLD) is trying to fix its operations and has made some progress along the way. But the company is being dragged down by Kmart, raising questions about whether that discount chain's time has come and gone.

Would Sears be better off closing Kmart? At the rate things are going, the answer is yes.

Kmart is stuck in a rut. Sales at its stores open at least a year fell 3.8% over the crucial holiday shopping season, The Wall Street Journal reports. Now it has just 0.6% of the nongrocery retail market. In the first nine months of its current fiscal year, the chain posted a $98 million operating loss and saw sales slide 5.5%.

We won't know for a while whether Kmart made a profit in 2012, but it lost money on an operating basis in 2011.

The Kmart stores that I've been to are remarkably similar. They're dirty. The shelves are cluttered, yet the customers are gone. Employees are nowhere to be found.

The Journal found a similar scene at a Kmart in Manhattan, where it reported abandoned carts full of merchandise, unevenly stacked towels and unfolded pajama sets lying about. "The tile floors looked as though they hadn't been mopped in some time, and clothes were piled in the corners of the dressing rooms," Dana Mattioli wrote.

Kmart stores in New Jersey took that a step further, selling expired infant formula and over-the-counter drugs. The chain will pay more than $300,000 in fines and be subject to inspections as a result.

Kmart used to fill an important role for budget-conscious shoppers. But those customers have many more places now that can meet their needs. Dollar stores sell groceries and household necessities. Wal-Mart (WMT) has a bigger selection than Kmart, often at lower prices.

In fact, the Journal cited data showing Kmart's prices were higher than Wal-Mart's and Target's (TGT) in five out of six items it checked at all stores.

Granted, that's a pretty small sample. But if that holds true and Kmart isn't necessarily cheaper than competitors, then what is Kmart's reason for existing?

More in moneyNOW

Jan 25, 2013 3:25PM
years ago I was a manager for the auto service center they had I was put in a store that has failed to make any money in a while I got there cleaned up the shop turned it around and they still were not satisfied .My customers that I had to really bust my butt to get them to come in and get there car worked on thought that the whole store was filthy and that included the auto dept.All I did was give people what they wanted and did it right thefirst time and all the bs stopped. but the store continues to run itself in the ground.And then corperate decided to have a video conference this actually took some cojones they were sitting by a pool in miami sipping mia tias and telling us how bad they were doing and that we should step it up or they will get rid of some of the dead weight around all the stores.Then they sold off the auto dept to Penske who wasnt any better just as money hungry as K Mart. 
Jan 25, 2013 3:25PM

Back in 1993, I was there for the building and opening of a Super K-mart in south Texas.  It was the best!  Unfortunately, it didn't last long; not sure why.  I was more upset to see a new building that housed Super K-Mart for only a few years being demolished and a brand new HEB built in the same spot. 

Jan 25, 2013 3:23PM
Our Kmart in Donelson, TN just went through a change in Management, and I can already see a BIG difference in just cleanliness and lack of clutter. Items are priced, the shelves are stocked, the service is a little better. It's not impossible to revamp with low-cost measures. If Kmart is going to compete in today's market, they can take a look at what Target is doing. For example, they have a team of employees that ensure pricing and that the departments are clean; they straighten until closing time, the store looks good, the items are on the shelf. Also, the registers are manned, or there is communication to ensure they have enough people at the registers. The same employees that clean/stock/help customers, are trained at the registers. Cross training! As a vendor, I have experienced the budget issues with Kmart (that there is very little money for fixtures, etc...) Fixtures are outdated and breaking. However, work with what you have, keep it clean and less cluttered, and help customers--that's what would keep me coming back as a shopper; Sales will increase, and managers can prioritize for improvements based on individual store sales & profits. I'm guessing more of the stores will be closing soon...but I would not shut down the entire Kmart chain if some of the stores are still successful.
Jan 25, 2013 3:20PM
I have shopped at our local Kmart since it opened. I do not like Wal-Mart and Target. The store is clean, well-organized, well stocked and open convenient hours. The employees at Kmart are friendly and do not act like it is a a pain to wait on you.  The store still offers layaway and in this economy it really helps.  If you don't like it then don't go but there those of us who will continue to do so as long as possible.
Jan 25, 2013 3:06PM

I knew there store would not have good-luck! few years back i had some bags that someone from the otherside of the store accidentally push down from the otherside and several bags fell on my head and i had i had injury to my neck and when i file a personal injury lawsuit they sent me a letter saying that they were in bankruptcy and my claim was included i am very happy that they are and have lost money!

Jan 25, 2013 3:02PM

when i started working for sears  10 years  ago it was a good company to work for,then k-mart and and the worst ceo i have ever seen (Lampert) came along and ran both companys into the ground.When will he sell it and let them rebuild.



Jan 25, 2013 3:02PM
The K Mart I go to is about 2 miles from my home. It's very clean, the employees are friendly and willing to help find what you're looking for. I agree with one of the comments that I don't want "Wally World" to be the only choice. There is a WalMart Super Store a half mile from my house and I'll drive BY it to shop anywhere else first. One of my beefs with WalMart is that some of the people who shop there act like it's a daycare for their kids. They're running around in the ailes playing with the toys while the parents just stand there with their thumbs in their butts thinking it's funny. When they leave, the toys their kids were playing with are left all over the place - Walmartians, indeed. Anyway, the one I shop at is nice to go to and I enjoy it. Too bad they're doing so bad everywhere else.
Jan 25, 2013 3:01PM

We have very few K Mart stores any more here in  Florida. There is just one near where I live, and it was going down hill a few years back. Now that the other KIT Marts in the area were closed this one has gotten much better. More checkouts are staffed, good prices, lay a way all year round. This store was never dirty or like the ones the others here are describing, nor were the others that closed. The biggest problem all of them had was understaffing.  Wal-Mart is way understaffed here and their prices keep going up. Target is fine if you are under 30. They cater to the young . Also Target is the most expensive of the 3.  I do not want to lose  K- Mart. I like shopping there.

The Super Wal-Marts with their grocery store, cuts down on their other products space. I go to a regular Wal-Mart when I do go. They took out the garden centers at Target to add groceries in or area. K-Mart doesn't need a full grocery department. 

The first Wal-Mart I ever went to, was when I was on vacation in Missouri back in the late 1960's, and it had a grocery department back then. 

When I buy groceries I do not want to put them in the same basket with my clothing, gift or other non grocery items.


Jan 25, 2013 2:57PM
I'd rather shop at Kmart anyday than f^king walmart
Jan 25, 2013 2:55PM

you companies need to stop hiring all foriegners to try and save a dollar on wages and put employees in these stores that care about what is going to happen to there job if things are not kept the way they should be people that have pride in there jobs


KMart should have quit while it was still S.S. Kresge.  It and the other dinosaur "dime store" chain F.W. Woolworth had long ago reached obsolescence.  One visit and any savvy shopper could see that this chain was a bottom feeder, with poor cleanliness and absolutely no assistaance to customers. 

Jan 25, 2013 2:49PM
I used to shop KMart all the time, but now I find the prices are higher than Target or Walmart, like they say the store looks cluttered and unclean.  They do not have a good choice of merchandise and trying to find assistance is nonexisting.  It is sad that the store has gone downhill.
Jan 25, 2013 2:47PM

If you close K Mart the only store in the town where I live is Wal-Mart. The Wal-mart here is usually our of  things I want. The grocery part is bare.  Yes Kmart is clurted and there are VERT few employees, But it gives us a choice and it has lay-away. 


Jan 25, 2013 2:45PM
I am not a huge fab of Kmart, but the store near my house is well run, clean and organized. Sadly, I think this is because they are so slow  that they have time to keep things tidy.
The time to shut down K-Mart was before they bought Sears.  That transaction never made a bit of sense, and is the biggest indictment of ownership/management.  The only possible reason would have been to get prime real estate locations, turn the best into Sears stores, close the rest and kill the K-Mart brand.  This sinking ship will end up killing Sears, Craftsman, and Lands' End, all once great brands that got sucked into Edward Lampert's incompetent clutches.
Jan 25, 2013 2:43PM
I am amazed because here in Mesa, AZ our KMart is clean and I find it efficient.  The prices are definitely better than Target, and I find the quality much better than Wal-Mart.  I also love that they have year-round lay away, rewards points, and a convenient location for me.  I really hope they don't close, I would be very disappointed.
Jan 25, 2013 2:42PM
In defense of the K Mart nearest me in KY, it is clean, well-organized and there is always help to be found.
Jan 25, 2013 2:40PM

Screw Kmart.  They suck and are horrible to the employees they do have.    I will laugh the day they shutter all their stores.  Hopefully the few employees they do have left will be able to find better jobs elsewhere.  Theres dumb and then theres Kmart Dumb!


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