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 24, 2013 9:16PM
Jan 24, 2013 9:15PM
The Kmart in Hartford, WI is wonderful--very clean, with competent, friendly employees.  Hopefully it will be here for years to come!
Jan 24, 2013 9:13PM
Not too much to complain about our local K-mart.  It's not the best...but it's tolerable.  If the same people running Sears are running's only a matter of time before they both head down the toilet.  Our local Sears is a nightmare.  First of all getting someone to wait on you is not happening.  Good luck finding a customer service station to pay if you do want to buy something.  In order to save money, the store closes at 8 pm ....even on weekends.  That's real convenient!  This year I decided to purchase a Craftsman tool box for my husband as a Christmas gift.  It was advertised in a Black Friday flyer as being on sale for $299.00.  However, i chose not to get out of bed at 4 am because I had to work at 7 am.  I was able to get to the store about 12:30 pm.  I knew I would not get the box at the sale price, but figured I would check it out anyway.  The young man quoted me $362.00.  I was cool with that because after all I didn't get out of bed at 4 am.  However when he proceeds to ring up the components of the tool box the price shows up as $511.00.  He cancels the sale and tries again.  Now is where it gets really good....without asking anyone else...another associate or supervisor...he tells me this  "while you were making up your mind, the price went up.  Maybe it will go on sale again before Christmas".  It takes a lot for me to be at a loss for words ...but this kid did it.  Long story short..when I got home I phoned and spoke to a manager.  She was horrified...called me back in ten minutes and I got the tool box for the $299.00 price.  She was a good manager and very helpful but if this is how they train their people on the floor, they are doomed to fail.
Jan 24, 2013 9:13PM
Kmart used to be great.  I remember the old Kresge's 5 and 10 store.  (Used to be called the five and dime) Those days are gone just like most mom and pop stores too.  Wal Mart has just about monopolized the cheap retail market...there only real competition is Target.  I love Target.  They're cleaner, better employees,  higher quality products...the list goes on.  
Jan 24, 2013 9:12PM
Worst service I've ever had in any store--no wonder.
Jan 24, 2013 9:12PM
In Columbia, SC, recently in the last few years, I was in a K Mart and half the over head flourescent lights were turned off. I asked what looked like a manager and he poudly told me "we are saving energy!" The store closed a year later due to lack of business.
Jan 24, 2013 9:12PM
If they would get rid of sears and get back to Mr Kresces basic line of thinking ,, that the customer is your first and lost thing that matters , full counters at the right price ,someone to help when needed, and friendly and open check outs , would make for good business
Jan 24, 2013 9:11PM
if the car companies can get government bail outs why cant kmart?
Jan 24, 2013 9:11PM

They need to visit the Kmart where I shop.  It is NOT dirty.  Everything is tidy, folded, in its place, and the store sparkles.  I love Kmart because it's not over crowded, there are no screeching children everywhere you go in the store, check out is quick and their plastic bags don't rip.  Don't judge the entire chain by a few stores in one geographical region please!


Jan 24, 2013 9:11PM

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 9:10PM
Jan 24, 2013 9:10PM
It's KMart's fault that they aren't selling much anymore. They are the ones that closed down all of their stores.
I'd much rather shop at KMart than Walmart. I hate walmart.
I would love it if KMart would make a huge come-back and kick Walmart back down where it belongs.
I know this will never happen, but I can dream.

Jan 24, 2013 9:07PM
At any giving day and including weekends, I see no more then a dozen cars in the parking lot. Only two checkout lanes are open at any time. I think it is time to say farwell to K-Mart.
Jan 24, 2013 9:06PM
yes kmart is a last century store... worst store ever
Jan 24, 2013 9:04PM
First go into a Kmart and wander around for a while.  Next go visit a Target.  After about 30 seconds you should have a clear idea as to why Kmart should shut down.  There really is no comparison.
Jan 24, 2013 9:03PM
I really don't understand what they expect from K-Mart. My city had three, now they are down to one. Meanwhile, Target and Wal-Mart are adding stores. Supposedly, K-Mart had all this really great real estate options that attracted Sears. Unfortunately, it is all in run down areas that K-Mart could not even make a profit in. I go to K-Mart about once a year and I feel like I am stepping back in time. Wal- mart made K-Mart feel like second class, and now Target makes Wal-mart feel the same. K-Mart is even lower. Dollar General looks more up to date than K-Mart. Either spend a little on your store environment, or go away. Few people will miss you.

Kmart who?  Haven't stepped in one in years.  Target and Walmart get my business.  They both have their place in the family.


Sears who?  Oh yah once a year ago for a tux rental and once recently because I had strict instructions from my mother in law for a honey do.  And perhaps a few times in past 10 years for my hubby's craftsman items.


I say close Kmart and save Sears.  Sears like Pennys have both been around 100+ years.  Based on that principal alone I would hate to see either fail.

Jan 24, 2013 9:01PM

We have given K-Mart 3 tries in about 2 months. The first we tried and tried to get someone in the jewelry dept, and the service desk told us, everyone was working the floor. At Christmas time-no jewelry. We left the cart with a few things n it.


the next time, i have some "shop your way rewards points" and it was about 11.00. at check out they told me i didn't have any , but that they were having this problem all day long. i left the full cart, after he had rung it up, gave my complaint to the service desk, BECAUSE no one in management could e found.


third time, the sales merchandise I had picked out, didn't come up as sale price. seems they could not find anyone to check the price. duh

that was the last time i entered k-mart a few weeks wonder they have no sales. dirty, everything is a mess, and there is usually no one to be found to help with anything.

Jan 24, 2013 9:00PM
K mart needs to quit being the old department store that time passed by. if they looked at what folks hate about Walmart and addressed that they could make a difference. It has worked for Target. No real lines at the checkout. More then one customer service person. Get good products that are different. K mart feels like an emancipated Walmart. No wonder it is. 
Burning your investors when you are relying on their business never helps.
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