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?

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793Comments
Jan 24, 2013 8:58PM
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Walmart does have a bigger selection but their stores are just as dirty and both Walmart and Target have terrible employees who turn their backs and run as soon as they see a customer who might need some help. I will miss Kmart if it ever goes away. It was a part of my childhood and have fond memories.
Jan 24, 2013 8:58PM
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Yayyyy , More jobs lost.  NO WONDER AMERICA IS FAILING.
Jan 24, 2013 8:58PM
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Went to the K-Mart in Dunedin ,Fla. and found it VERY clean and stock in the right places with a very clean and nice garden section.........
Jan 24, 2013 8:57PM
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Kmart is too over priced.  I can remember when I was a kid, my parents always shopped there because they had good prices.  My local Kmarts issues are, I can go to other stores and buy name brand cheaper than Kmarts store brand, they never keep shelves stocked, always out of items, and priced higher.  Hate to see a once icon go but in todays economy, cant afford to pay more for the same stuff you can buy elsewhere cheaper.
Jan 24, 2013 8:57PM
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I cannot stand Wal-Mart!! I will go there however to avoid the absolute disgusting conditions of the K-Mart out here by me. The customer service is a joke-if you can even find somebody. When you finally do, 9 times out of 10 they usually dont know what they're doing, the quality is so poor that on top of the million things I do already, looking at their clothing line makes me want to take up sewing myself. I walked in there sometime last week to give them another shot- yeah right, I walked right back out! K-Mart is done, and Sears will be next I'm sure.
Jan 24, 2013 8:57PM
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Some of the comments I agree with. They really need to get back to the basics. When quality and value were a given. The new digital highway we are on seems to be slowing down,come on Eddie. Lets get back to basics.
Jan 24, 2013 8:56PM
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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.

Jan 24, 2013 8:56PM
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It's either the managers or corporate deciding who gets money to let their store have enough money for upkeep.  The K-Mart in the south side of town (frequent by Mexicans) was trashy and smelled; the K-Mart on the north side (middle-class neighborhood) was clean and respectable.  I need K-Mart as they carry items of clothes in my size that I like (don''t like Target and Wal-Mart selections.) Toddler clothes are the right size.  Wal-Mart's are undersized (size 4 pajamas fit a 12-months old though the head opening would be too small.)  Managers get bonuses for keeping their cost down.  That means no repairs or upgrading and few clerks.
Jan 24, 2013 8:56PM
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Its Sears fault for this not kmart.
Jan 24, 2013 8:52PM
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I have to agree with the article. Last time I went to Kmart there were no people to help me find an item, 10 people waiting to cash out and only one (1) register open. Talk about lack of lack of service!!!
Jan 24, 2013 8:51PM
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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.

 

Jan 24, 2013 8:45PM
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I like going to K-mart because there are no crowds and I don't have to see people out shopping in their pajamas like at Walmart.
Jan 24, 2013 8:45PM
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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,,,

Jan 24, 2013 8:43PM
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I seldom go to Kmart but my last trip about a week ago will be my last trip. One checkout lane open with six people in line. Not a big deal except there were 4 or 5 other employees at the service desk doing absolutely nothing. Management must be blind or just pathetic to not see why these stores are about to go under.
Jan 24, 2013 8:42PM
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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. 

Jan 24, 2013 8:41PM
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I don't think we gave up on Kmart as much as Kmart gave up on us. Have you been to a Kmart lately? They are dirty, disorganized, understaffed, poorly stocked, beat-up old stores that haven't been remodeled in 30 years. It doesn't matter how low the prices are, the stores are a DUMP. Why would anybody shop there? 
Jan 24, 2013 8:41PM
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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!

 

Jan 24, 2013 8:41PM
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Both Sears and Kmart are run by people who just do not understand that  keeping stores clean and bright brings in customers. I suspect they thought a little savings in lighting and janitors would save them. The stores are dark, dreary outdated relics. Its a shame too. Chasing pennies and losing dollars. Walking into these stores is depressing. That and cheap looking out dated fashion drove people away. It was so obvious I can't understand  the stupidity of the CEO's and board for not getting it. 
Jan 24, 2013 8:41PM
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Ive had such a horrible experience the last three times I went there. First was on Black Friday. I asked about a toy I wanted for my daughter that I couldnt find. A sales person brought me a siliamr toy and told me it was the same one,at the same price. It wasnt and then another sales person and customer service had me paged to sell me the wrond item again. Then they advertised a sweater on a display rack for $14.99 but when it was rung up it was $29.99. Turns out a sales person put the wrong price sign on the display. They wouldnt honor it and 2 of the cashiers actually started yelling at me in front of customers. I was so mad when I left about how I was treated and how poorly they ran their store that I went back the next day and returned my $350 worth of toys I bought and went over to Walmart and repurchased the same toys and saved myself $55. That was another problem,I got back about a dollar less then what I paid for each item bc they claimed they had given me reward points so instead of taking the points off, they had to reduct the money instead. Finally, my last time in there and the only reason I went back was bc I had recieved a $5 gift card for a camcorder I bought on Black Friday as well..not included in the $350. When I went to go use it at the register it wouldnt work. Here the cashier never swiped the gift card to activate when I got it. I had to pay for my purchase then go to customer service and have the card activated for the next time...Well no next time. I returned my items and threw the Gift card on the counter along with my rewards card!!!
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