May 6, 2002-- Home Textiles Today,
Kmart delays 10K filing
Bankrupt Kmart hinted that things may be worse than anyone suspected when it warned last week that it may restate its 2001 results and report losses "significantly" deeper than it had earlier reported.
The retailer said it will not file its 10-K annual report with the Securities and Exchange Commission until it finishes a review of some aspects of its accounting policies, specifically those that deal with supplier allowances and rebates and general liability reserves.
The retailer said it expects to report that its loss for last year will be "significantly higher" than the $244 million it originally reported for the fiscal year that ended Jan. 31.
Losses at Kmart, the nation's third-largest retailer last year, continue to escalate this year, and the company said in a SEC filing that it rang up a $135 million loss for the four weeks ended March 27. Same-store sales during the same period tumbled by 8.4 percent. In February, sales declined by $174 million, and same-store sales tumbled by 10.8 percent.
Kmart now expects to file its annual report by May 15, and said until the current review of accounting policies is completed, it is "unable to quantify the change" in results.
Corporate layoffs continue to climb
The pace of corporate layoffs climbed by 10 percent in April, suggesting continued weakness in the U.S. jobs market following a slower-than-hoped-for recovery for the economy.
In April, American companies announced plans to cut 112,649 jobs, a 10 percent increase over the 102,315 layoffs announced in March.
The hard-hit telecommunications industry accounted for roughly one in every three job cuts, reported Challenger, Gray & Christmas, the international outplacement company that tracks layoff announcements on a monthly basis.
"April was the 16th time in 17 months that job cuts exceeded 100,000," said the company. "While the April figure was 32 percent lower than the 165,564 job cuts announced in the same month a year ago, job-cut announcements in 2002 are very close to the record pace established in 2001."
Through the first four months of this year, a total of 555,783 layoffs have been announced, just 3 percent fewer than the 572,370 job cuts announced between January and April 2001. Last year, Challenger noted, ended with a record 2.0 million job cuts.
Most affected was the telecommunications sector, which has been responsible for 120,698 layoffs so far this year, about 22 percent of the year-to-date total.
New orders increase in March
In an upbeat sign that a recent rally in the manufacturing sector is continuing, new orders for U.S. factory goods increased by a better-than-expected 0.4 percent in March, the Commerce Department reported.
The March performance in the key manufacturing segment was sharply better than expected, with economists and Wall Street looking for a much smaller gain of 0.1 percent.
Cementing the good news coming out of American factories, the agency also revised the February increase in new factory orders up to 0.2 percent from a preliminary figure of 0.1 percent.
Manufacturing was particularly hard hit during the recession that began last March but is now showing some signs of perking up.
In another positive sign, inventories fell by 0.6 percent, following a 0.5 percent decline in February.
Sending out a mixed signal, however, the Commerce Department said new orders for durable goods fell by 0.5 percent. But that number, said the department, doesn't include highly volatile data for the semi-conductor industry because of the volume of suppliers who chose not to participate in the monthly survey.
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DayThree from the NY Textiles Market