TROY, Mich., Jan. 14 (UPI) -- Bankrupt discounter Kmart Tuesday told employees over a satellite broadcast it will close another 326 stores and a distribution center eliminating more than 30,000 jobs.
Kmart, which has been de-listed on the New York Stock Exchange, filed for Chapter 11 bankruptcy protection on Jan. 22, 2002, and has been waging a losing battle against rivals Wal-Mart and Target Corp.
The struggling Michigan-based discount retailer closed 283 stores in 2002, slashing more than 22,000 jobs, and had hoped to begin its turnaround with strong holiday sales. However, seasonal sales of $3.71 billion from Thanksgiving through December were 5.7 percent lower than the same period a year earlier despite round-the-clock shopping before Christmas. The company reported net income of $349 million for December.
Kmart has lost more than $4.4 billion since 2000 -- more than $2 billion since filing for bankruptcy.
Shares fell 9 cents, a 40 percent slide, after Tuesday's announcement to 16 cents a share on the over-the-counter stock market.
"Kmart intends to close 266 Kmart and Big Kmart stores and 60 Kmart SuperCenters in 44 states and Puerto Rico, as well as one of its 18 distribution centers," the company said. "This action is intended to enhance the company's financial and operating performance by allowing it to further reduce costs, improve cash flow, streamline distribution and focus its resources more efficiently."
Kmart will it have about 1,500 stores in the United States, Caribbean and Guam after the store closings.
The firm said it had received a commitment of up to $2 billion in loans from GE Commercial Finance, Fleet Retail Finance Inc. and the Bank of America N.A. for a fast-track reorganization that would allow it emerge from Chapter 11 by April 30.
Kmart's board of directors approved a five-year business plan Monday that will be presented to a U.S. bankruptcy judge in Chicago next week.
"The developments we are announcing today mark an important milestone in Kmart's reorganization," said Chairman and Chief Executive Officer James Adamson. "I am extremely proud of the progress that Kmart has made over the past year with the support of our associates, vendors, creditors and customers. The company will emerge from its reorganization cases with a much stronger balance sheet, liquidity position and cost structure."
