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?
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
- Abandoned no more: Schools become housing
- White Castle woos Valentine's Day diners
- Netflix shares soar on solid quarter
I think it was mismanaged try adding some entertainment and foods and better quality clothes will attract shoppers. Try remodeling the rundown stores with different colors.
The one in Torrance CA was always dirty, (dirty as in 'feet sticking to the floor) and the aisles were too crowed so avoided it as many others must have done as now it is gone....one in Eureka CA sooo much nicer, but took me a while to find out as I avoided shopping there until I 'had to' as I assumed all K-Marts were like Torrance.
Point: you let one store go below standards, you hurt your brand and your business.
I have a good story for you, To prepare ,a little late I must say, days prior to Hurricane Sandy 2012, I went to FOUR Sears stores in Maryland. I had the bright Idea to see if I could purchase the floor display Generator. Three of the stores had already sold floor displays of their Gens... THe fouth and last store in Bowie Maryland.. I approached 2 sales people at the same time, I asked if I could purchase the floor display GEn, both sales people said that the Store manager had told them that they weren't allowed to sell the display, " because they then wouldn't have a display item. But they were going to be getting a shipment in a couple of days. ( this of course would not help me, the delivery of store sale gens would be post storm, a bit late). The sales rep had told me it was against store policy, per mgr to sell floor displayed items, WTF ! As I walked into the Landover Md store there was already 2 different families discussing the purchase of the last floor display generator. While walking into the store I watched thesecond to last gen get wheeled out the door having been just purchased..
SEARS-- YOur not what you use to be,,,
Kmart bought out Sears and now there is talk of shutting KMart down. lol. What a joke. The problem with Kmart not being able to keep pace with Wal Mart is they werent expanding into the suburbs where the people were moving. They kept their old stores in the areas that were losing population and that has in turn cost them a lot of money. There are several Meijer (a michigan based Wal Mart type chain) within 15 minutes of my house. There is 1 KMart. Thats just not going to cut it in that type of market.
It would be horrible if Kmart closed. Walmart and Kmart are the only two stores that care the things I need and kmart is closer. I live in a Small town and if kmart closed I am sure The prices at Walmart would go up!
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
- Coffee futures are up big again on Brazil concerns. I noted yesterday that it was over 5% higher at $1.92/lb. Today, coffee is +6.1% at $2.07/lb.
- Crude oil remains in the red and is down significantly in recent sessions. Wednesday's bearish inventory data helped to extend losses this week
- Since a recent high on June 20, crude oil is down about $8.50/barrel
- Today, Sept crude oil is -0.7% at $97.46/barrel
- Natural gas was in the red ... More
More Market News
Investors are anxious to see if hiring can maintain its strong pace in the second half of the year.
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'