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

792Comments
Jan 25, 2013 10:41AM
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I threaten to blow my KMart up every time I attempt to shop there again (not really of course).  It's very convenient to my work, making it the obvious choice for quick shops, say for toothpaste or milk, etc.  But they NEVER have the product I go for.  And, the few times they have something I've come for, it's priced way higher than even Target.  Our KMart is filthy, shelves are dirty & registers are never open.

 

I worked in a KMart while my husband was stationed in Beaufort, SC during the holiday season because I didn't want to buy him presents with his own money.  Boy, was I glad that was only a 2 month gig.  Ewww.

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I love Kmart I live in Lakeland, FL The S. Florida Ave store is clean and organized and employees are very friendly. I shop there alot its close to work. One of the most important features I love is that they have layaway. I live on a budget and it makes things convenient when I can pay a little each week and still get the things I want . LOVE YOU KMART !!!!! I have shopped in Kmart since I was younger living at home in Columbus, OH
Jan 25, 2013 10:34AM
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Here's a thought: why not fire the workers/managers who don't keep the stores up?

...Kmart might have a fighting chance then

Jan 25, 2013 10:33AM
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Have been in KMart 2 times in my life.  Both were not a good experience.  Don't know who would shop at this store.  I prefer Tarket, but there are the Cosco's, Sams, Walmart (which I never shop at either).  Who shops at this store anyway????? 
Jan 25, 2013 10:31AM
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K-mart has always been the lowest of the low in the big dime store type companies.  I've never known them to be any better than they are now.  That is going back all the way into the late 70's of my K-Mart memory.
Jan 25, 2013 10:30AM
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I wish there was a way to get more people back to shopping at K Mart. I began to shop Wal Mart but now I go to K mart more. I am finding K Mart has better prices them Wal Mart. Over the years the Wal Mart has raised their prices. So if you haven’t shopped K Mart in a while...Please go check them out. I needed a new refrigerator and found the best price at K Mart...Sears was $85 higher for the same thing! I do think they would do better if they do a facelift on many of the stores. The one in my neighborhood has been there over 45 yrs and needs some TLC. They did redo the bathrooms (well over do), now the rest of the store needs some updating.

Jan 25, 2013 10:28AM
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Kmart used to be a great company, a classic example of what  overpaid executives can do, to a good business. I know from experience.
Jan 25, 2013 10:28AM
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What Kmart and Sears are experiencing is the same thing they did to the small town stores years ago.
Jan 25, 2013 10:27AM
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I feel the same way as the article. I liked Kmart a lot but it has gotten junky lately and I do like Walmart and they do have a lot more to offer. One thing though with them I DON'T like their clothes (Walmart). Like I do Kmart has nicer stuff for that. I use the Dollar Stores mostly for other stuff not food. Afraid to buy that there (food).. I would feel bad they were around a LONG time but so were other big stores that bit the dust in the past...
Jan 25, 2013 10:26AM
Jan 25, 2013 10:24AM
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k mart in my town is a place i dont go cause its has very poor lighting its dirty and very depressing to go to, prices are to high poor selection its like they got a lot of stuff there but dont really have any thing. k mart needs to go by the way side like gibsons they just cant keep up with wal mart and target.
Jan 25, 2013 10:22AM
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can't blame the unions on this one!
Jan 25, 2013 10:20AM
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Last time I was in Kmart there had no cashier on duty to check out you had to go to customer service desk to check and wait in line with people trying to return stuff and that is when I gave up on Kmart
Jan 25, 2013 10:20AM
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I've said for some time that Sears/Kmart should close both chains and reopen under a new name.  Both operations have started carrying like merchandise so they cut each other throats especially if they are close to each other.  Looks like they would pick the best location and close the other.  It's true Kmart pricing is higher than Walmart and I now see in many cases they are even higher than Target.  The Kmart in my hometown is 30= years old and the last time I was in there it looked dirty as does the Kmart in the town I live in now. 

 What I find rather stupid is that they have lots of cash registers in Kmart and lines to China and back but no one to run the empty cash registers and they have started the send your receipt to your e-mail address which is just stupid and takes up time at the checkouts.  I don't know if anyone would buy out Kmart since they all need a remodel and a good cleaning up.

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I worked for Kmart a long time ago and they have closed all the stores in Houston. I have to say they did treat their employees good. I have heard of Wal-Mart not so good about that. 
Jan 25, 2013 10:13AM
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Yep our Kmart is dirty,  piles of clothes not put away...walking the isle's is actually dangerous.  I say close them down...way to pricey for such a low class store.
Jan 25, 2013 10:13AM
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I rather like K-Marts.  I'm low income and it helps because i can put things on layaway when you can't do that at anyother store.  It's not just at christmas time either. Thats what i like about K-Marts.  So please don't take it away.

 

Jan 25, 2013 10:12AM
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what is Sears doing to help out? The clothing is the same as before, but the prices are higher..why aren't the stores staffed? cleaned? The departments are old and tired. There seems to be no finger on the pulse of the people shopping. Sears needs to wake up and make Kmart more competitive with Walmart and Target. BTW Hate Target.
Jan 25, 2013 10:11AM
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I live near a Kmart and it's in a convenient location - but I avoid it like the plague because I get tired of playing 20 questions when trying to pay at the register. I just want to buy an item for $2.99 and I have to answer rewards card, phone number, zip code, warranty, survey, then scan my credit card, sign paper, then wait for a 4 ft long register receipt in 3 pieces to print.
Jan 25, 2013 10:11AM
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Kmart screwed its stockholders (I being one of them) a decade ago.  I haven't been in one since.  Goodbye and good riddance!

 

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