Adamson says no more Kmart closings needed
January 20, 2003,
Though Kmart announced last week that it will shutter 18 percent of its store base by early April, the announcement was a surprise to no one. And home textiles manufacturers that supply the discounter have not been watching passively, but have already begun putting contingency plans in place.
Last week, Kmart, which placed fourth on HTT's Top 40 Retailers for 2001, with $1,826 million in home textiles sales, announced the closing of 226 Kmart discount stores and 60 Kmart SuperCenters for a total of 326 stores and one of its 18 distribution centers, resulting in the loss of 30,000 to 35,000 jobs.
The retailer also received a commitment for up to $2 billion in exit financing from GE Commercial Finance, Fleet Retail Finance Inc. and Bank of America N.A. This credit facility, which will be secured by inventory, would replace the company's current $2 billion debtor-in-possession facility on the effective date of a reorganization plan.
The retailer posted its first profit since its filing, in December, of $349 million on a 5.7 percent decline of comp-store sales. It is also accelerating its timetable to exit Chapter 11 by April 30, and the board approved a five-year business plan last week. The company expected to finalize and file its proposed plan of reorganization and related disclosure statement with the bankruptcy court on or about Jan. 24.
"A lot of people have been speculating about the future of Kmart, and I hope now they realize there is a future," Jim Adamson, chairman and ceo, said during a media conference call. He stressed that "we are done" with store closings.