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
Don't bother going to any other stores. Just shop at Wal Mart. Wal-Mart is the future. It is the only future. A sea of Wal-Marts everywhere. It will be nice not having to choose any longer. The only choice will be.. you guessed it.. Wal-Mart.
There will be a sea of thousands of blue and tan workers making their way to Wal-Mart in every city. Everyone will work for Wal-Mart, you see.
Kmart is done. If they are not going to put some money into and update the stores, hire more employees and fill their shelves. Otherwise I feel they are too far gone.
I don't particularly like Sears right now. Avid customer for 20 yrs. Credit card always in check, bought appliances with it. Deployed in 2008 and with that money was able to pay off and keep a zero balance. In 2012 they chose to not renew my card because I had a zero balance and low interest rate (it was at 0% during deployment)
back in the day kmart was great!!
went over the holidays too much cloths on floor, not one employee was smiling, had a bad attitudewhen asked a question, most not all employees look like they just got out of county jail or they just got out of drug rehab
Just watch what happens this year. J.C. Penney, Sears, and K Mart will all close their doors and go out of business for good. Then there will be a grand opening for the "Taj Mahal Walmart" with everything you need under one roof...except merchandise made in America...
but yeah who's pocketing money that needs to be reinvested instead? they have great apparel lines. I'd hate to see it go under instead of succeeding!
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.
[BRIEFING.COM] The stock market ended the holiday-shortened week on a mixed note as the Dow Jones Industrial Average shed 0.1%, while the S&P 500 added 0.1% with seven sectors posting gains.
Equity indices faced an uphill climb from the opening bell after disappointing quarterly results from Google (GOOG 536.10, -20.44) and IBM (IBM 190.04, -6.36) weighed on the early sentiment. Google reported earnings $0.15 below the Capital IQ consensus estimate on revenue of $15.42 ... More
More Market News
Serious issues like drought and the deterioration of the developed world spell opportunity for this industry leader.
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'