Cape Kmart survives hefty corporate cutback

Thursday, February 13, 2003

Business Today

The Cape Girardeau Kmart is still in operation.

Kmart announced its second - and biggest - round of cutbacks Jan. 14, saying it will close 326 more stores and eliminate 37,000 more jobs in hopes of getting out of bankruptcy by the end of April.

But the Kmart in Cape Girardeau, which has about 100 employees, was not among them.

Corporate officials said that the Cape Girardeau Kmart had nothing to worry about.

"We looked at portfolios, financial and strategic aspects," said Kmart spokeswoman Renee Gielniak from the corporate headquarters in Troy, Mich. "We looked at store sales, growth margins and cash flow. Based on that, there was no reason to close that store."

She also said there shouldn't be any future threats of the Cape Girardeau store closing.

"We don't expect any additional closures, so there's no reason to ever expect this store to close," she said.

The discount chain that pioneered the blue-light special and introduced Martha Stewart styles to the masses will still have some 1,500 stores and about 191,000 employees if the cutbacks are approved by a federal bankruptcy judge. But Kmart will emerge from bankruptcy one-third smaller than it was when it went in.

Kmart filed for Chapter 11 protection from its creditors a year ago after failing to compete with Wal-Mart's low prices and Target's hipper merchandise. In its first round of cutbacks, it closed 283 stores and cut 22,000 jobs last year but still lost more than $2 billion. That move included closing the Sikeston store.

This second round of closings affects stores in 44 states and Puerto Rico. Texas will lose 54 stores and a distribution center. Florida will lose 24 stores, California 19, North Carolina 18 and Georgia 16.

Since filing for bankruptcy, Kmart has seen declines in sales at stores open at least a year. Sales in November were down 17.2 percent from a year earlier, and December sales were off 5.7 percent.

Respond to this story

Posting a comment requires free registration: