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TROY, Mich. - Kmart Corp., the nation's third-largest retailer, is closing 72 of its less-profitable stores in 28 states and putting extra inventory on sale in an effort to improve earnings.
However, Juneau's Big Kmart is not on the chopping block, according to local store manager Darren Ginochio. The stores to be closed have been notified, and Juneau's is not one, he said.
Corporate communications officials were not available for comment this morning, but Ginochio said he's not aware of any past discussions about closing the Juneau store.
While most of the stores being closed are marginally profitable, Kmart said they didn't justify additional investment because of their locations and suitability for expansion. Six Super Kmarts and 66 traditional Kmarts will close, most of them by Nov. 1.
About 5,000 workers will be affected by the closings, Kmart spokesman Steve Pagnani said Tuesday. The hourly workers will lose their jobs, but are being advised to apply to other Kmart locations, he said. Managers will be transferred.
Kmart, which operates 2,171 stores, is considered to be in better financial condition than it was in the mid-1990s, but it has struggled to compete with Wal-Mart Stores Inc. and Target Corp. Its stock price is down 54 percent in the last 52 weeks, from its high of $15.25 June 28, 1999.
The retail chain is in the midst of an ambitious yearlong plan to build its presence on the Internet as well as renovate and open new stores.
At a shareholders' meeting in mid-May, Kmart said it would open 20 new Big Kmart stores, expand 12 to 15 existing stores and add five new Super Kmarts - 24-hour centers that combine traditional Kmart discount stores with full grocery operations.
As a result of the closings, Kmart will take a one-time restructuring charge of $740 million during its second quarter. Kmart earned $403 million on revenue of $35.9 billion in fiscal 1999.