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?
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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IT'S very simple: Train the managers, give them the tools they need, If they can't or wont manage,
Get someone else. When I had a job, if I didn't do it One day, the next day I didn't have to worry
about working the next day: I would not be working there. Upper level management didn't do this !!
For one thing. For it to be a discount store it sure is expensive, and every time you go in there it's only 2 or 3 people working. No one in the store is there to help you, because they are either at the resister, in the customer service booth or stoking the selves. Kmart wake up!!! Discount means discount. You will sell more by pricing it for less and not just 2 or 3 penny's. You get it in bulk so I know you are not paying that much for it, and selling items at a 200% mark up. Not good in this economy, people are just trying to make it and all you people are worried about is making a profit.
Ok so close the Kmarts and the Sears and what do you left Wal Mart and Target... No thanks.
Sears corporation needs the merge Sears and Kmart and give Wal Mart a run for the money. How can Sears do this? Simply Wal Mart doesn't sell appliances, good hand tools, and a lot of the things Sears sell.
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