Kmart will close 7 stores in Md
In a move that experts say doesn t cut deep enough, Kmart Corp. said yesterday that it will eliminate 22,000 jobs and close 284 stores including seven in Maryland as part of its restructuring under Chapter 11 bankruptcy.
Of 34 stores in the state, Kmart will close those in Aberdeen, Columbia, Forestville, La Vale, Laurel, Randallstown and Waldorf. A company spokeswoman said a total of 559 jobs will be cut.
Nationwide, the country s third largest discount retailer will close 271 Kmart discount stores and 12 Kmart Supercenters in 40 states and one store in Puerto Rico. Job cuts amount to roughly 9 percent of the Troy, Mich., company s 250,000 employees.
Once a pioneer in the discount repatagonia black hole mini messenger review1tail industry, the 103 year old company recently suffered through a poor holiday sales season, tumbling stock price and several credit downgrades before becoming the largest retailer ever to seek patagonia black hole mini messenger reviewbankruptpatagonia black hole 25l reviewscy protection.
The company filed Jan. 22.
The decision to close these under performing stores, which do not meet our financial requirements going forward, is an integral part of the company s reorganization effort, Charles C. Conaway, Kmart s chief executive officer, said in a statement.
We are confident that doing so will provide the company with a healthier, more productive store base.
Analysts and retail industry experts expected the store closings, but some said the chain, with more than 2,100 stores, will likely have to close more in the future.
Every day you re in Chapter 11 hurts your position as a retpatagonia mixed guide pants ukailer, said Howard Davidowitz, chairman of New York City based Davidowitz Associates Inc., a national retail consulting firm.
In my opinion, approximately six months from now you ll see another announcement from Kmart proposing to close another flight of stores. The trick is to get [the unprofitable stores] all the first time . and I don t think they did.
Shelly Hale, an analyst who follows Kmart for Banc of America Securities, agreed that the closings were too few. If this is all the company s going to close, it s going to continue to under perform. . They should have closed closer to 500 to 700 stores.
Over the past two decades, the rise of Wal Mart Stores Inc. and Target Corp., the nation s No. 1 and No. 2 discounters respectively, eroded Kmart s market share. But retail experts say the chain s management shares the blame for squandering the company s once dominant market position. Now, they say, the company needs to find a new niche.
The question is: What mission do they define for themselves? Who are they? Davidowitz said. That s the job of management. I ve been waiting 2patagonia outlet store 3abn0 years for management to come along and do that.
If they can t do that, my expectation is Kmart won t be here in five years because there is no need for Kmart. . My expectation is for tpatagonia black hole mini messenger review2heir disappearance.
Kmart s announcement has already hurt another company. tire retailer, said yesterday that ipatagonia discount code cratet will close 63 automotive centers in Kmart stores that were part of the closing announcemenpatagonia discount code interflorat.
At Kmart s Columbia store, across Route 175 from a Target Greatland, customers hadpatagonia discount code office mixed feelings about the store closings.
I m surprised they lasted this long, said Mary Weeks. Since they built the Target, I don t come here anymore.
Others were saddened.
It s horrible if they close, said Terri Stinson of Perry Hall, a customer for 30 years. Bankruptcy Court in Chicago apatagonia everlong review external hardpproves the closing plan. A hearing is set for March 20, and, if the plan is approved, the stores will close in the subsequent patagonia black hole mini messenger review060 to 90 days.
The cash strapped company expects sales generated from store closings and related cost savings to be about $550 million this year and $45 million annually after that. The store closings will add to the company s earnings before interest, taxes and depreciation by $31 million. The companypatagonia fleece jackets that can be personalized expects to record a charge of $1.1 billiopatagonia fleece sale giftn to $1.3 billion from the store closings.
The court also approved $2.2 billion in financing Thursday, which Kmart will use to fund store operations as it moves through bankruptcy, the company said.
Kmart hopes to emerge by next summer; we think that s probably optimistic, said Andrew F. Ebersole, a bond analyst who follows the company for KDP Investment Advisors in Montpelier, Vt. The company is hoping for 18 months; we re thinking 24 months is more reasonable.
The retailer had many problems that led to its stumble. For one, it didn t go far enough in investing in distribution systems even as Wal Mart spent billions. Kmart ended up not able to compete with Wal Mart on price because their cost structure is too high, said Davidowitz.
Also, customers who couldn t find advertised products in stock went instead to Wal Mart or Target, despite the allure of Blue Light Sppatagonia black hole mini messenger review3ecials and the name brand draw of Martha Stewart products.
