Kmart to Close 283 Stores By June
May. 17, 2002
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DETROIT (AP) _ Kmart Corp.'s plan to close 283 of its stores will be completed by the end of next month, the bankrupt retailer said Friday.
Troy-based Kmart announced in March that it would close the unprofitable stores as part of its restructuring under Chapter 11. The company will still operate more than 1,800 stores nationwide.
About 22,000 employees will lose their jobs in the store closings, and no severance was offered for hourly employees.
A Kmart store in Hibbing, Minn., a town of about 18,000, closed Friday after having liquidated its merchandise.
``I'm looking at going back to school,'' said Valerie Rendle, 41, who has worked at the store for 24 years. ``We are a struggling mining industry town, and this is just more wood on the fire. Almost all of our associates are going to continue to be unemployed. There is almost no one here who can find full-time jobs.''
Kmart was the largest retailer in Hibbing until a Wal-Mart moved in. Kmart has struggled to compete with Wal-Mart and Target Corp., and filed for bankruptcy protection Jan. 22 following disappointing holiday sales, ratings downgrades and a stock dive.
Rendle said there is resentment among employees toward the retailer, especially after announcements that top Kmart executives received multimillion dollar loans from the company in 2001.
Kmart reported a loss of $2.42 billion for the 2001 fiscal year in a filing Wednesday with the U.S. Securities and Exchange Commission. The SEC is looking into Kmart's accounting practices, and the FBI said this week it is reviewing Kmart documents as part of an investigation into possible criminal violations.
In its annual report, Kmart said it has stopped monthly severance payments of $43,000 to former executive vice president David Rots and $38,000 to former executive vice president Anthony D'Onofrio.
The company had previously not named executives whose payments had been halted.
Kmart also announced Friday that James Mixon had been appointed senior vice president for logistics. Mixon will report to Julian Day, the retailer's president and chief operating officer.
Kmart stock closed at $1.06 _ down 5 cents _ Friday on the New York Stock Exchange.
On the Net:
Kmart Corp., http://www.kmartcorp.com