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 10:49PM
Sears has been wanting to sell off Sears/Kmart BOTH and live off the core brands selling them in other stores... the problem is they haven't found a way to do that. Sears and even Kmart feels like going back in time... They should kill Kmart and then really severely turn around Sears. I would recommend a hip attitude/modern attitude throughout the store. You need to look at the competition and make an assessment. JCPenney is doing this...but they are late. I see what Walgreen's is doing to it's stores... i would march the CEO of SEARS holdings in there and go: LOOK!
Jan 24, 2013 10:48PM
I  still like Kmart and I shop there every once in a while.  I think what I am reading is sad about the condition of the stores and the merchandise and the way the things are being handled.  This can be changed. I don't think closing the stores will help anything at this time.  Price cutting might help bring people back in.  Cleaning up the stores will help things out also.  I know the Ceo's of the company of Kmart can come of with some ideals that will turn things around.  The employees can do the same also.
Jan 24, 2013 10:45PM
I wonder if things are going 50 percent off.They have a good  camcorders.I'll keep an eye out online for sales that are big..I wanna catch them before they go fast.
Jan 24, 2013 10:44PM
who said Sears & Co. could manage any kind of business , Sears has gone to the dogs with the dam chinese crap  they sell, the service is bad, and the articles you go look for not there.
Jan 24, 2013 10:42PM

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.

Jan 24, 2013 10:42PM
I was just there in my city of Augusta,Ga and i bought a jack that was on the shelf with no prices and as i carry the heavy thing only one employee saw me and offered me a buggy she was using. This employee made my day when she checked the price for me. I also went to electronics where there was another employee stocking and another customer looking to check out she had to ring a bell when there was no one but the one employee saying she wasn't on the register. Once i got to the check out only 2 registers were open so i thought as i walked up one cashier cut her light of and this was during midday to early afternoon when you would expect 6 or 7.The only line then had 3 customers before me and one struggling to us a check. The customer before me walked out the line to see if the previous cashier was opened and she told her she just closed but if she only had one item she could ring her up. I was livid!!! After debating to just leave a manager saw me and sent me to customer service to ring out. I wasn't offered a bag for the jack or help to my car. I think if there was better service to the customers would come back!
Jan 24, 2013 10:41PM
Our Kmart closed some time ago. They didn't have any business for the past 4 years, and finally went down. After Sears took it over, I never could find anything I wanted in that store.
Jan 24, 2013 10:40PM
Kmart has the worst service , I hope thet do go under
Jan 24, 2013 10:39PM
Okay, I'll get right to the point...OPEN THE DAMN CHECKOUT LANES !!!  If you can't afford cashiers, then close the doors (same goes for WalMart, Sam's, Costco, etc.) I am sick of standing in line to check out for 30 minutes when there are 5, 6 and sometimes more lanes where nobody's home. It's ridiculous !!! And it's REALLY BIG TIME RIDICULOUS when you pay a membership fee and still have to stand in line because there aren't enough cashiers. Oh, but be sure and pay those CEO's multimillion dollar salaries. When you stop and think about it... what a bunch of ignorant bastards we are.
Jan 24, 2013 10:38PM

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.

Jan 24, 2013 10:38PM
I think the K-Mart in Fayetteville, NC is just poorly managed.  It seems that every time I go there(not too often as of late) they have only 1 cashier with several customers in line.  Cashiers are friendly but just don't seem enthused about their jobs.   You can expect the cashier to have a problem with several sales and hve to wait several minutes for a supervisor to come to assist.  No such thing as a quick stop at K-Mart.  Otherwise, they are always clean,  appear to be well stocked and prices are good.  Maybe I am just unlucky when I shop there, but poor service drives off customers.
Jan 24, 2013 10:37PM

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)
Jan 24, 2013 10:35PM
I use to love Kmart until their prices were higher than stores that are closer. During the blizzard of 2010 I went shopping there on my way home. Took 2 hrs to fill my cart when the electricity went out. They said I couldn't check out because computers were down. What happened to a backup plan? You know the old fashion way of accepting a credit card. Instead I left without groceries and then further down the line went to Walmart since I needed the groceries. Shopped for 2 hours trying to get what I already had. Left in the blizzard only to get a flat in the parking lot. Wasn't going to get fixed for 3-4 hours if insurance company helped. Nice gentlemen changed tire in blizzard. Got home at 11:30 pm. All because I went to Kmart first. It is too far away to go all the time and they didn't even outbeat the post holiday discounts as quickly. Bummer.

Jan 24, 2013 10:33PM
Jan 24, 2013 10:32PM

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

Jan 24, 2013 10:32PM
in the words of Charlie Babbitt, Kmart sucks.
Jan 24, 2013 10:31PM

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...

Jan 24, 2013 10:31PM
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