Kmart, a once-popular discount chain with more than 2,000 stores across the United States, has become the latest victim of the retail apocalypse, with just four stores still operating.
The former retail giant recently announced it was closing two more of its stores – leaving just two in New Jersey, one in Long Island, New York, and one in Miami, Florida, according to the Oregonian.
The announcement came after decades of the discount chain’s failure to keep up with low prices from Walmart and Target, a problem that has only been exacerbated by the rise of the internet and the inability of the store to brand itself properly.
It was supposed to be “so bland that no one thought it was uninviting,” said Ben Schultz, a graduate student in public history at the University of Wisconsin in Milwaukee, who has studied the decline of the sales chain in detail. “It was a place that could be common to everyone.”
But “when they tried to change their image, they had no image”.
Kmart, a once-popular discount chain across America, recently announced it was closing two more of its stores – leaving just four in the US
In its heyday, customers lined up for hours to find out what was on sale
Over the past 20 years, Kmarts’ global profit margins have shrunk from $49 billion to just $3.26 billion
Kmart has filed for bankruptcy twice since the turn of the century, with global profit margins falling from $49 billion in 2005 to just $3.26 billion in 2020. It continues to do well in Australia.
And shares of Kmart – which merged with the now-defunct Sears department store in 2005 under the Sears Holdings conglomerate – have been flat since October 2021 at less than one cent.
Target’s stock price, meanwhile, was at $194 on Wednesday, and Walmart’s was at $136.
Kmart shares have stagnated since October 2021 under one cent
On Wednesday, Target’s stock price was at $194 and Walmart’s was at $136.
Kmart was founded by Sebastian Spering Kresge as the SS Krege Company in 1899 in the Detroit suburb of Garden City as a dime store where shoppers could find everyday necessities such as household items, clothing and toys.
Kresge retired as chairman in 1925 and the business was passed on to Henry Cunningham.
In the 1960s, the company morphed into Kmart, seeking to dominate the discount retail industry with low prices on national brands – a feat it achieved.
The retail apocalypse is coming to beloved stores
The retail apocalypse is the closure of many brick-and-mortar stores, especially those of major chains around the world, beginning around 2010, as customers began to turn to Amazon in greater numbers and other online retailers.
The sharp decline in sales nationwide from brick-and-mortar stores has accelerated in recent years, but the pandemic has accelerated their decline.
Major retailers closed 12,000 stores in 2020, following an already devastating 2019 when more than 9,300 stores closed.
According to a report by financial services firm UBS, an additional 80,000 stores, or 9% of the national total, will close in this ‘retail apocalypse’ over the next five years as online sales increase. .
Source: The Week
Shoppers would often wait for Kmart employees to advertise a Bluelight Special – or daily deals in specific departments and rush to see what they were, before grabbing a meal at the cafe.
In 1977 it changed its name to Kmart.
“Kmart has absolutely reigned supreme in the retail discount market,” Schultz said.
“Their goal was to be America’s discount store,” he said. “They basically wanted to have a monopoly on the industry and it seemed like it was within their reach.”
The chain reached its peak in the early 1990s, when it operated nearly 2,400 stores and employed approximately 3,500 people in the United States and Canada – and even acquired other stores like Payless Drug Stores, the Borders and Sports Authority bookstore chain, all of which have also now gone out of business.
In 1991 it raised $1 billion in equity through a convertible preferred stock offering, its website says, and by 1993 it had revenue of about $37 billion.
But the following year it began closing hundreds of its stores, a process that accelerated over the next decade, 24/7 Wall Street reports, as management failed to accelerate the money to modernize stores and upgrade technology that would have allowed them to more thoroughly track inventory and retail sales.
“Kmart has fallen behind in technology and logistics,” Ken Nisch, president of retail branding and design firm JGA told the Detroit News in 2019. “They lost their price advantage by compared to Walmart.
“They were at a point where they could never catch up again.”
By 2002, the company had lost its spot as the second-largest retailer behind Sears to Walmart, reports Mass Live, and it filed for Chapter 11 bankruptcy.
Its debt was eventually bought out by hedge fund operator Eddie Lampert, who merged Kmart with Sears in a deal worth $11 billion.
But Lampert, who remains the owner of the business, failed to revitalize it, and Sears and Kmart filed for bankruptcy again in 2018.
Kmart once operated nearly 2,400 stores across the United States. Here, managers are seen celebrating the opening of a new Kmart in New York in 1974
Now fans of the nearly defunct store have taken to social media to remember Kmart’s heyday, sharing photos of the crowds the store once drew and old flyers as they lamented the closure from their local stores.
Some will now be transformed into Targets and Walmarts to continue providing a wide range of supplies to middle-class families, while others are being converted into malls and other retail stores.
Kmart, however, continues to survive online, selling washer and dryer appliances for just a few thousand dollars, as well as Route 66 jeans and Disney clothing.