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 25, 2013 6:47PM

Kmart where I live is great. We get our meds there . Great prices and very clean.


Jan 25, 2013 6:46PM
I thought it was only my Kmart that was filthy!
Jan 25, 2013 6:42PM
Kmart has very high groceries that is why they try to keep in business and that is why I do not shop there
Jan 25, 2013 6:36PM
Way past time... close Sears as well.... these stores are no longer needed and are out of time. They don't get it.
Jan 25, 2013 6:26PM

First car I ever  bought was a 58 Chevy, Last one is a 2013  Malibu, with 14 GM cars in between including a 2001 Buick regal with over 200,000 miles on it and still going strong Go GM----- Buy American




Jan 25, 2013 6:10PM

I hate to see any business go under but looks as if K-Mart is a prime target.

 the one in my hometown in KY, sounds a lot like the ones described in this article.

 one day while i was shopping at K-Mart i went to the public bathroom & couldn't

 believe my eyes, it was so dirty i just turned around & walked out. i went to the service desk

 and told the person in attendance what i had just experienced & i was seriously considering

 calling the health dept. as i was walking out of the store i heard the store manager being paged

 over the intercom system. i went back about a week later and found a spotless restroom.

Jan 25, 2013 6:07PM

Much as I hate to admit it, the company once known as Kresges (spelling ?) that was a clean, moderately priced store that sold everything from soup (at the lunch counter) to fresh roasted

peanuts and cashews. A store where you got your money's worth on anything you purchased.

K-marts are now a dirty, rumpled merchandise store. Groceries are generally higher that most

super markets. The meat dept. seems to be pretty good and usually at competitive prices. No

real need to always shop there. Maybe start chopping heads at the top before it's too late and

they will be forced to close.........

Jan 25, 2013 6:06PM
I am no fan of Kmart, Walmart, or any of the big box stores but just because you are not the cheapest does not mean you should not exist.  If your last statement was taken literally then we would eventually wind up with a monopoly of one company that was the cheapest.  Of course when we reached the point where they had all the business and could further lowers prices, the monopoly would have the option to charge what they wanted.  I look for smaller, more personalized businesses that offer competitive price ( not necessarily the lowest price), quality staff, and expertise, knowledge, and service after the sale that help me make and informed buying decision.
Jan 25, 2013 6:05PM
Jan 25, 2013 5:52PM
Haven't been to a K Mart in years.  They closed the nearest one years ago and it's not worth searching out another. Not with a Target and a Walmart 10 minutes away.  They could shut them all down as far as I'm concerned.
Jan 25, 2013 5:49PM
Like many who have commented in the post and the article, K-Mart seems to have lost it way. How many times have I walked into this store in Pineville, NC and wanted to scream for it lack of service, cluttered aisles, CLUTTERED shelves, etc. What happened to the K-Mart 15 years ago when I happily went there to purchase clothes my daughters, Easter baskets, and toys??? I think the CEO's who have let this chain go asunder should be spanked, fired, without a severance package, and put on UI for awhile. I see the bright colors of Target and cringe when I pass the parking lots of
Wal Mart at how packed they are. K-Mart doesn't have to be this way and NEITHER does Sears!!! What is wrong with YOU executives to let a traditional store go the way of Woolco and Roses and other great stores that I shopped so long ago? ARe you going to let Wal Mart, who has driven a wedge in the economy and stripped so many town and businesses with its "undercover" practices rule?? Get a wake up call and get to work. Instead of investing in your portfolios put the money in the stores, clean them up, get some good customer service and morale and pride going on and give Wal Mart a run for its money. Those who know what Wal Mart is all about will SUPPORT YOU!!!
Jan 25, 2013 5:46PM

I really have to force myself to shop there. I feel a sense of loyalty since I have been shopping there from young. My whole family grew up with K-Mart. I have to totally agree with the article, the items are overpriced and the sales people are extremely rude. I go out of my way to avoid the larger monopoly stores like Walmart. If they were more competitive and the salespople were nicer I believe the store would make it.

Jan 25, 2013 5:43PM

Perhaps Big City K Marts are different from our local one in MA. The service has been good, people nice, no carts left in aisles, the store is clean and organized and goods are at a reasonable price.

During the 2012 Holiday shopping season, things were bustling. The reported items may reflect some stores, but certainly not all of them.

There are only so many people that have money to buy things with and their likes determine where they will shop. If you are running a good store, you should see profit. If not, expect a loss. If you manage one do your job.



Jan 25, 2013 5:33PM

Even stepping inside a Kmart is a depressing experience, you seriously question what year you're in after 10 minutes. The downfall of Kmart is based on multiple factors true, but I think the most glaring factor of all is that the corporation as a whole has just given up and are holding on to milk the last dollars from what used to be a top earning cash-cow. If Kmart is to survive they need more than just a new look, better atmosphere for the stores, they need a serious attitude adjustment from TOP to BOTTOM.

But I seriously doubt that will happen, I feel Kmart and Sears have passed the point of no return. It's all a matter of time - the end is in sight.

Jan 25, 2013 5:31PM
KMart spends bucks advertising in DFW, the closest store is 150 miles away. I'm no CEO but this is a stupid business decision.
Jan 25, 2013 5:25PM
Our KMart in Mauldin, SC is always clean, and there are plenty of sales clerks to help you.  If the check out lines are long,  they will check you out at the service desk.  I get all my prescriptions filled there because they are cheaper there.
At one time,  Walmart advertised "made in America".  Now, as with other stores, you can hardly find anything made in the USA.  I used to get nice ladies tee shirts, shorts, pants, etc.  at Walmart that were well made and lasted forever.  Now you can't even get a decent pair of sweats there.  Their tee shirts are thin and cheap looking that I wouldn't wear to bed, let alone out somewhere.
You have a hard time finding any ladies clothing or mens clothiing at Walmart.  I couldn't even find where the junior, plus,& ladies began and ended.  Those departments are too small.  They need to stock them up and separate them.  They all seemed to jumbled up together."Needless to say, I no longer shop Walmart.
Please don''t close our KMart..  The Mall is too far away to run in to pick up a few items and I couldn't afford them anyway.    I'd pay a little more at Kmart to avoid Walmart any day.
Jan 25, 2013 5:08PM

I worked in management at K-Mart  back in the 60's and 70's. K-Mart's demise was upper management

treating in store managers poorly. Many managers and asst managers at store level were fired. New managers were hired and paid less. There was no loyalty among managers and that filtered down to hourly employees are well. Also Walmart operated on less profit on hard-lines and soft-lines. K-Mart did not keep up with the trends in electronics and clothing. End of story!

Jan 25, 2013 5:03PM
Maybe rebrand it as "Sears Outlet". In effect, they already are just that. Unfortunately, the Sears brand doesn't have much more cachet these days.
Jan 25, 2013 4:53PM
No, don't close them!

Where will all the social science majors go for jobs?
Jan 25, 2013 4:52PM
Better KMart than China -err Walmart
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