Kmart expects to announce store closings by end of March
Friday, February 1st 2002, 12:00 am
By: News On 6
TROY, Mich. (AP) _ Kmart Corp. plans to announce next month which of its stores it wants to close as part of a turnaround effort.
The company's bankruptcy lawyer, John W. Butler Jr., detailed the retailer's plan to return to financial health by July 2003.
Kmart hopes to tell the bankruptcy court on March 20 which poorly performing stores it wants to close, Butler said Thursday. Kmart has not said how many of its more than 2,100 stores it will close, but analysts speculate it will be in the hundreds.
Butler said he wanted the company's creditors and vendors to know Kmart is moving quickly to close stores that aren't making enough money, cut other costs and cement relationships with important suppliers.
Kmart plans to tell the court this month that it wants to continue contracts that put popular name-brand merchandise such as Martha Stewart, Disney and Joe Boxer on its shelves, the Detroit Free Press reported.
Butler said Kmart also is asking suppliers to ship goods without demanding cash payments in advance or on delivery, The Detroit News reported. The term of Kmart's $2 billion credit line is 27 months, covering the retailer beyond its July 2003 target date for exiting Chapter 11.
The nation's third-largest discount retailer filed for Chapter 11 bankruptcy protection last month following lower-than-expected holiday sales and fourth-quarter earnings, downgrades by credit-rating agencies and a stock dive.
Two committees _ one representing five financial institutions, the other representing 13 general creditors, mostly suppliers _ will negotiate Kmart's restructuring and how it will pay its bills.
Chuck Conaway, Kmart's chief executive, said he would be talking with store employees about the company's plans. The first meeting was Wednesday in a Chicago suburb, and he expects to speak in most of the major markets in the next six to eight months.