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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792Comments
Jan 25, 2013 2:15PM
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WALMART IS KILLING EVERYTHING NO MORE MOM AND POP STORES SOON THE CONVIENIENT STORES WILL BE OWNED BY WALMART TOO  AND THEN THE GOVT WILL BUY WALMART AND CONTROL WHAT YOU BUY AND EAT AND TAKE IN MEDICINE AND USE IT AGAINST YOU IF YOUR NOT EATING WRITE OR TAKIN MEDS THEY WILL BE ABLE TO DETERMINE YOUR HEALTHCARE POLICY BY YOUR HABITS ITS COMMIN HOME THECHICKENS ARE COMIN TO ROOST AND WHITEY WILL TAKE THE COUNTRY BACK  THE BLACK MAN IS TEMPORARAY 3 MO YRS AND WHITEY WILL RULE FOR THIRTY YRS
Jan 25, 2013 2:11PM
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it realy to bad the big K and sears are run the way they are ceo get paid if the doors are open or not. They should be paid by how wel a store is doing. Not by how full of sh""""t they are.
Jan 25, 2013 2:10PM
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I think they need to re-evaluate Kmart. if they update the stores and really have comparative prices I really feel people will go back. Wal-Mart did it and Targets prices are not even that grate yet people cant stop going. Department stores like Sears, JCP, Macys good but one stop shop is were the opportunity to grow is at, that were the $$$ is.

Jan 25, 2013 2:09PM
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Our Kmart closed many years ago, an still missed.
Jan 25, 2013 2:09PM
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The two signs you are at a Kmart:

Hundreds of feet of shelving with no merchandise on it
Half the products in the store display with no prices

Jan 25, 2013 2:07PM
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I agree with this article 100% and have been saying this for sometime now when it comes to Sears/Kmart chances of turning things around. Kmart is done. Its time has come and gone, perhaps with better management it could've made it but not anymore. Time to put it out to pasture and make it another footnote in the history of American retailers come and gone. Honestly I don't really think the marriage of Sears or Kmart ever made any sense but they did think there might be some benefit but it didn't work and certainly had no chance with the crap management they have. Sucking the company dry like a vampire to boot.

Sears dump Kmart before it is too late and then revamp and focus on the tools, appliances, auto, and limited extent electronics - ditch the softer side stuff and reduce store sizes to accommodate just these areas and look back to the niche market of small town store as I think they could have a good hold and following there. Also look at getting more of the Craftsmen tool made back in America again. Interesting how the catalog is dead now even though that is where Sears made its name, they used to be the Amazon.com of catalogs back in the day but time to move on from that too.

I think Sears can make it if they transform and refocus on the main products people look for and buy when they go there (see my list above), the rest is dragging them down as dead weight. If they don't act fast then it will all go with it. Your choice Sears live or die.

PS - Sorry that people will lose jobs but better some than all, though if this happened most of the upper management should go and do so with no severance pay or anything similar, straight fired and kick out to the curb.

I think its time

Jan 25, 2013 2:06PM
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I still love K-Mart .. not to crazy about Sears, Sears has ruined itself with it's credit card special promotions with high interest rates and those days are over.
Not many K-Mart stores around now but i have noticed when they have a sale it is a good one. I support K-Mart over Walmart any day. If they can hang in there and not be greedy, cut the wages from the top in half and keep the stock holders happy while keeping the employees at the bottom they may do better than Walmart. People want good customer service at the bottom and happy employees. When you pay peanuts you get monkeys.
Jan 25, 2013 2:05PM
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K Mart stores across the country might be bad as some might say but there is one in Somerset Ky that is awsome. We stop there everytime we go to Nashville and love it. It is so clean and I have pointed that out to my husband several times. Come on people, it's the management that is running down that chain of stores.
Jan 25, 2013 2:05PM
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This is the worst company to work for. They overwork their managers to the point they basically turn them into stock boys and girls. SORRY excuse for a company.
Jan 25, 2013 2:05PM
Jan 25, 2013 2:02PM
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   Went to a Kmart the other day (after avoiding the place for a couple of months), only to be reminded of the reason I had stopped in the first place.  The store was dirty, the lines for check out were long, the prices are never correct when you get to the register and most important of all the cashier was rude and nasty. 

   No matter which Kmart store I go into, I have never, ever met a friendly cashier.  I go out of my way and  try to be nice since they always look sad and depressed, but this cashier took the cake.  In this economy, I would have felt bad getting someone fired, so I did the next best thing -- she made me vow never to enter a Kmart store again.  That was quite a decision, since I love to shop, but for my sanity, I decided it was best

Jan 25, 2013 2:01PM
Jan 25, 2013 2:00PM
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I'd have to join the group. Kmart used to be "the" place to buy things. now it is "the " place to avoid, if you can even find one.

 

Shame, it went from the top to under the bottom in just a few years.

 

Looks like if they still carry any kind of quality goods that it wouldn't be that hard to pick it back up.

 

Hire new management, base their saleries on how well the store runs and then bring in new people as the existing ones don't seem to worth sXXt. clean the place up and take some pride in it and maybe it might turn around. Don't know though as it has been down a long time.

Jan 25, 2013 1:59PM
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Keeping Middle America Really Tacky

Jan 25, 2013 1:57PM
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all companies ahve gone to hell like this world screw it all
Jan 25, 2013 1:57PM
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I've been in a pinch, and had to go into Kmart for items before (USB cord or universal charger, etc) and have purchased loose items, out of the package and on the floor because it was the last one they had.
Jan 25, 2013 1:54PM
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Kmart is losing money because they kept the name but put Sears prices with the items.  Also, before Sears came along, Kmart's clothing was much better as well as the prices.  The sells they have now is not really a sale.  It's cheaper to go to WalMart or Target.
Jan 25, 2013 1:53PM
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I can tell you one thing about Kmart,
My daughter in-law went to work for them  before Christmas and the Management treated her badly and with disrespect,everything in the store was disorganized, dirty, couldn't find employees for assistance . On another occasion  I went into the store to make a purchase and when I went through the Checkout, it was slow and then it was my turn to check out and the Cashier was wearing a blue shirt that looked like it hasn't been washed in a week and had Kool-Aid and food stains on it! He stunk real bad too!
I think if Kmart wanted to survive and thrive , it has some Major work to do on it's Core and that means to start at the top and work down to it's employees !
Look me up if you want a change and start to make a profit and Thrive as one of Americas Iconic Store Chains!


Jan 25, 2013 1:53PM
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stopped shopping at K-Mart eons ago, like you say prices aren't cheaper, ad items rarely in stock, dirty and dimly lit , short staff, and even rude managers. K-Mart gave me a money order for a refund in the mail then when I went to the store to spend the refund the manager refused to cash the money order and was really rude when doing so. that was my last trip to a K-mart!!!!
Jan 25, 2013 1:53PM
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It should have been closed 30 years ago.
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