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 12:58PM
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Really, the dirty & poor service aren't all that new.  I remember going to K-Mart more than 40 years ago with my grandmother.  They were dirty then, the bathrooms were disguting, and the staff was rude and always acted as if you were lucky they allowed you to shop there.  Remember the running American joke when something fell apart, you were asked:  "..what, did you buy it at K-Mart?"  I'm not a huge Wal-Mart fan, but K-Mart is just a plain depressing place in which to shop.  I am sorry for the employees, but this has been long in coming from a corporation which has long regarded their customers with contempt, I believe. 
Jan 25, 2013 12:58PM
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The article is correct.  I made the mistake of trying to shop at the K-mart by my house.  It was dirty, it had a weird smell, what I was looking for from their sale ad was non-existent, and finally the only employee that was available to "help" was the lone cashier.  I think there might have been 5 other customers in the store at the time, and this was a Saturday afternoon.  I don't know what happened to them as a corporation, but they really need to try to figure it out.  Most of the K-Marts in my area have closed, and I am waiting for this last one to leave also.  
When I was a kid, and there wasn't a Wal-Mart in the state, I got a lot of stuff from the K-Mart.  My mom always shopped at there, now she won't go near them, and neither will I.  
Jan 25, 2013 12:55PM
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I never shop at K mart....their stores are always dirty and trashy looking.  One store I went into smelled like a preservative used in shipments and the shoe dept always smells like a tire store. I wouldn't dream of buying any grocery products there......they should close
Jan 25, 2013 12:52PM
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I for one like Kmart.  They do not have the best prices on all items, but when they have a sale, it is usually a good one!  If you check the ads on a weekly basis, the more likely items you need will be there.  Our store is clean, very clean.  And sure at certain times of the day, coverage on the floor is light, but someone is available.  Not all Kmart's are the same.
Jan 25, 2013 12:51PM
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Since they were bought by Sears , they have charged Sears prices for less than Kmart quality. So what did they expect to happen. Most of the clothing looks like clothing district jobbers stuff. Poor quality , inconsistent stocking.  Merchandise labeling and shellf prices never match. I had to throw out 2 pairs of Joe Boxer pajamas because the flannel was so stiff and the dyes in the fabric caused rashes all over my daughter. Washed the first , 3 times.Jeez guys , close them both.
Jan 25, 2013 12:50PM
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I really hope someone intelligent and able to do something reads some of these comments.  I used to love kmart, and ours is not nearly as bad as some i am reading about, however having no real customer service, poor merchandise quality, and really, those computer check outs never work, feel bad for the checkout person, one checkout open with a line behind them and top it off with computer issues,  yikes.  Get this kmart....we still want to shop with you but you dont care..!  bring back the lunch counters, the blue light specials, turn your stores around to a clean organized store with all the lights working, and SELL "MADE IN AMERICA MERCHANDISE"  ONLY.  You will see flocks of us wanting to buy american made goods.  If it is decent quality at a decent fair price you will make money.  Sell yourself as 100 percent made in america quality goods...fix your stores, hire enough staff to keep the place nice, bring back your old fashion blue light specials, and for goodness sake, promote the american ideals of good old fashion made in america goods in a family atmosphere.  If you build it they will come!!!! 
Jan 25, 2013 12:49PM
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our Kmart in Prescott Valley Az. is clean and pretty well stocked and I would hate to see it closed  but it probably will because a walmart is going to be built.. We really don't need another walmart around here we  have two in Prescott just about a half hour away Do we really need another one?????
Jan 25, 2013 12:48PM
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I WOULD MUCH RATHER SEE THE SEARS STORES GO, K- MART ST0RE'S PRICES ARE MUCH BETTER..
Jan 25, 2013 12:48PM
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Maybe KMart out to shut down Sears also. Both stores are a joke now, and don't even resemble their stores of the past. 
Jan 25, 2013 12:47PM
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Man, don't close K-mart! Shop there all the time, so I don't have to go to the more expensive Target. I refuse to go to Wal Mart.

Jan 25, 2013 12:45PM
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I think so,...my wife wont get anywhere close to them....libtard commie obama loving freaks, they need to go away...they wont even let the marines do toys for tots in thier stores
Jan 25, 2013 12:45PM
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Instead of closing it down, find a progressive, (and agressive) new buyer.  Sell it!  It provides jobs, (with better pay and benefits than Walmart), to thousands of citizens in this country!  Kmart provides an alternative to shopping at Walmart
Jan 25, 2013 12:45PM
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I like K-marts layaway, Walmart doesn't have one except at the holidays!
Jan 25, 2013 12:42PM
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Kmart really needs a really good revamping.

I love Kmart. I miss the old kmart deals. I CAN NOT STAND walmart stores.

the best thing that Kmart can do for itself is to give itself a total makeover.

and then Kmart can come back with a vengeance and knock the walmart

stores off the map.

 

Jan 25, 2013 12:41PM
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Time to go....bye bye K-Mart.  Sears still has some great brands...time to jettison the dead weight and move on.
Jan 25, 2013 12:39PM
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i think that if they do close, a form of competiton will vanish. Competition is what keeps prices lower in our economy. I live in a small rural town, with no competition. Our major retailer, which I will not mention, but one that was mentioned in the article, can charge what they want. The prices are not lower than K-mart. Also, for the economically challenged, K-mart allows them to use layaway so their families can have things to start to school and their children have Christmas. I have always shopped at K-mart, and would love to continue to do so. Karen
Jan 25, 2013 12:39PM
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Come to think of it, how much more business has my local K-Mart gained since the Wal-Mart in Fairless' moved down to Rt. 13? I had kinda forgot about the place, never mind that it's next to SAM'S CLUB!. Seriously, when you know competition drives down prices, we need to start playing K-Mart off Tar-zhay(!) and the Waltons again before the system gets us.  There used to be 5 and 10s galore with Woolworth's, McCrory's, Newberry's, Kresge's, etc. around, not to mention all the regional giants(Strawbridge's, Marshall Fields, Filene's etc.) that Macy's gobbled up.

Jan 25, 2013 12:39PM
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our kmart in Prescott valley is well stocked and clean. I hope our store doesn't close but since another walmart is opening I would guess it probably will. hats off to Kmart it has done a great job.
Jan 25, 2013 12:39PM
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I went to Kmart for a tv. No one was waiting on electronic dep. After 25 minutes an employee show up. We had to wait 45 until tv box came from storage. It was my last trip to Kmart. .
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