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Kmart (/ˈkmɑːrt/ KAY-mart), formerly Kmart Corporation, operated since 2019 by Transformco, is a department-store chain and online retailer in the United States and its territories. It operates three remaining Kmart locations — a big-box department store in the US Virgin Islands,[7] a big-box store in Tamuning, Guam,[8] and a smaller location in Florida. The Florida location remains open in the former Garden Shop of its Kendale Lakes, Florida (Miami postal address) store, while the adjoining big box building is occupied by another retail chain, At Home that has since leased the space.[9][6] The company closed its last full-sized big-box store in the mainland United States in 2024.[10]

Key Information

Before 2018, Kmart owned and operated a much larger chain of its namesake stores. The company was headquartered in Hoffman Estates, Illinois, United States.

The company was incorporated in 1899 as S. S. Kresge Corporation and renamed Kmart Corporation in 1977.[11] The first store with the Kmart name opened in 1962 in Garden City, Michigan.[12] At its peak in 1994, Kmart operated 2,486 stores globally, including 2,323 discount stores and Super Kmart Center locations in the United States.[13][14][15][16] From 2005 through 2019, Kmart was a subsidiary of Sears Holdings Corporation, which owns Sears.[17] Since 2019, Kmart has been a subsidiary of Transform SR Brands LLC, a privately held company that was formed in 2019 to acquire assets from Sears Holdings.

History

[edit]

Early years

[edit]
This 1940s postcard shows the Kresge store in Springfield, Massachusetts (Store #26)

S. S. Kresge, the founder of the company that would become Kmart, met variety-store pioneer Frank Winfield Woolworth while working as a traveling salesman and selling to all 19 of Woolworth's stores at the time. In 1897, Kresge invested $6,700 saved from his job into a five-and-dime store in Memphis, Tennessee. He jointly owned the first store with his former tinware customer, John G. McCrory.[18] Kresge and McCrory added a second store in downtown Detroit the following year. These were the first S.S. Kresge stores.[19][20][21] After two years of partnership, he traded McCrory his share in the Memphis store, plus $3,000, for full ownership of the Detroit store, and formed the Kresge & Wilson Company with his brother-in-law, Charles J. Wilson.[20][21]

In 1912, Kresge incorporated the S.S. Kresge Company in Delaware with 85 stores.[22] In 1916, Kresge incorporated a new S.S. Kresge Company in Michigan and took over the operations of the original company, becoming the modern day Kmart company. The company was first listed on the New York Stock Exchange on May 23, 1918.[23] During World War I, Kresge experimented with raising the limit on prices in his stores to $1.[24] By 1924, Kresge was worth approximately $375 million and owned real estate of the approximate value of $100 million.[25][26] Growth early in the 20th century remained brisk, with 257 stores in 1924, rising to 597 stores by 1929. Kresge retired as president in 1925, continuing as the company's chairman.[22] The Great Depression reduced profitability and resulted in store closings, but the number rose to 682 in 1940. After the war, shopping patterns changed and many customers moved out of the cities into the suburbs.

1960s–1970s

[edit]
Kmart's longest lasting logo, used from 1969 to 1990

Under the leadership of executive Harry Cunningham, S.S. Kresge Company opened the first Kmart-named store, at 27,000 square feet (2,500 square meters) on January 25, 1962, in San Fernando, California. It was referred to by Kresge as a "bantam" Kmart and was in fact originally intended to be a Kresge store until late in the planning process,[27] This happened just six months before the first Walmart opened, while the first ground-up full-size Kmart with 80,000 square feet (7,400 square meters), opened on March 1, 1962, in Garden City, Michigan. Cunningham and Sam Walton were both inspired by Ann & Hope, which they each visited in 1961.[28][29] Seventeen more Kmart stores opened in 1962.[30] Kmart Foods, a now-defunct chain of Kmart supermarkets, opened in that decade. Though the chain continued to open Kmart branded stores, the company was still officially known as S.S. Kresge Company.[31][32]

The Kmart Foods logo used during the 1960s

Company founder Kresge died on October 18, 1966, at age 99.[33]

Jupiter, an extra discount chain, was started around this time

Around the time of the opening of the first Kmart, some poorly performing S.S. Kresge stores were converted to a new "Jupiter Discount Stores" brand, which was conceived as a bare-bones, deep discount outfit.[citation needed] During the 1970s, Kmart put a number of competing retailers out of business. Kresge, Jupiter and Kmart stores mainly competed with other store chains like Zayre, Ames, Bradlees, Caldor, Hills, and those that were operated by MMG-McCrory Stores (McCrory, McLellan, H.L. Green, J.J. Newberry, S.H. Kress, TG&Y, Silver's and eventually G.C. Murphy Co.). In 1977, S.S. Kresge Company changed its name to K Mart Corporation.[34]

1980s: Last Kresge stores

[edit]

In 1980, Vice Chairman Bernard M. Fauber was elected as the chairman and as the CEO of Kmart.[35]

In April 1981, the 2,000th Kmart store opened in Kearny, New Jersey which eventually closed in May 2021.[36][37] By the end of 1981, there were 2,055 Kmart stores across the United States and Canada.[38]

In 1987, the Kmart Corporation sold its remaining 76 Kresge and Jupiter stores in the United States to McCrory Stores,[39] and the brands were almost entirely discontinued, although Canadian Kresge and Jupiter stores continued to operate until 1994.[40]

Kmart experimented with co-branding in 1985, when the in-store cafeteria at the store in Canton, Michigan, was converted to a Wendy's.[41]

As well as that Kmart also co branded with Bruno’s Supermarket to create a brand new Hypermarket called American Fare.

The final Kresge's logo that was discontinued in 1990 as the chain began to shift to only focus on the Kmart brand

Until November 1990, when it was passed by Walmart, Kmart was the second-largest retailer in the United States, after Sears.[42] In the late 1980s and into the 1990s, the corporate office shifted much of its focus from the Kmart stores to other companies it had acquired or created, such as Sports Authority, Builders Square, and Waldenbooks.

Blue Light Special

[edit]

The Blue Light Special was a sale promotion within the store for a short period within store hours only. It was advertised using a rotating blue light, in the same style a police car used, and was announced over the store public address system with the phrase "attention Kmart shoppers", a phrase which became a pop culture reference.[43] The original concept for the Blue Light Special was a limited-time offer to sell slower-moving merchandise.[44] The sale was first introduced in 1965[45] and was retired in 1991.[46]

In the 2000s, Kmart periodically brought back the Blue Light Special. It was started in 2001, discontinued in 2002, briefly revived in 2005,[47] revived again on Saturdays in 2009 (offering surprise hour-long sales on selected merchandise) and for a final time in November 2015.[45]

1990–2001: New image

[edit]
The front of the Super Kmart Center store in Cambridge, Ohio (store #3555), as it appears before it was downsized in 2015 and closed in 2018; this location is now Rural King

In 1990, in an effort to update its image, Kmart introduced a new logo.[48] It dropped the old-style italic "K" with a turquoise "mart" in favor of a red block letter K with the word "mart" written in script and contained inside the "K".[49][50] Kmart then began remodeling stores shortly thereafter.[51] This logo was replaced in 2004 with the current one.[52] In 1990, Little Caesars Pizza opened its first in-store Kmart restaurant in Rochester, Michigan[53] (coincidentally, Little Caesars and Kmart were both founded in Garden City, Michigan, in 1959 and 1962 respectively). In 1995, Kmart also tried to reinvent itself by using the short-lived name Today's Kmart.[54]

Kmart's red classic logo (1990–2004)
The Super Kmart Center logo that was used primarily in the early 1990s.

Super Kmart Center (Super Kmart) opened an all-new location on July 25, 1991, in Medina Township, Ohio, featuring a full-service grocery with a full-service deli, seafood counter and bakery. It also had general merchandise like many Kmarts had.[55] However, this location was downsized in 2011 and was one of a number of Kmarts closed in early 2012 following poor Christmas 2011 sales.[56] The second ground-up Super Kmart Center opened in Copley Township, Ohio, featuring an in-store video rental center, and an in-store carryout Chinese restaurant.[57] This location has also shut down.[58] The last Super Kmart Center in Howland Township, Ohio, closed on April 8, 2018.[59] Besides the Medina and Copley locations, many more Super Kmarts opened nationwide.[60]

The company would again revise its name in 1991 after 14 years, changing slightly to Kmart Corporation.[61]

In 1992, Kmart entered the Eastern European market with the purchase of 13 stores in the former Czechoslovakia.[62][63] These stores were sold off in 1996.[64]

The company also began[when?] to offer exclusive merchandise by Martha Stewart, Kathy Ireland, Jaclyn Smith, Lauren Hutton, and Thalía. Other recognizable brands included exclusively licensed merchandising of products relating to Sesame Street and Disney. Actress and television personality Rosie O'Donnell and actress/director and producer Penny Marshall became among the company's most recognized spokespersons.[65]

In September 1995, Kmart sold its money-losing in-store auto repair centers to Penske Corporation for $112 million to operate them as Penske Auto Centers.[66][67] Penske later closed the auto repair centers in 2002 as a result of a payment dispute with Kmart.[68][69]

Big Kmart opened in Chicago, Illinois, on April 23, 1997.[70] The format focuses on home fashions, children's apparel, and consumables (The Pantry).[58] Most Kmart stores were remodeled to this format during the late 1990s and the early 2000s.[71] Initially, this approach was successful and sales numbers had grown by 10 to 15% in the Kmart stores converted to the Big Kmart format.[72] During 1997 and 1998, the company either converted regular Kmart stores into or opened outright 1,245 Big Kmart locations.[73] By 1998, 62% of Kmart's stores were Big Kmart locations.[74] In 1998, Kmart acquired 45 former Venture stores and converted them into Big Kmart locations.[75] There were a high of 1,900 Big Kmart stores during the year 2000, compared to about 100 for Super Kmart and another 100 remaining traditional Kmart locations.[76]

This Super Kmart Center logo was used on store maps and the former Super Kmart Center stores in Mexico during the 1990s.

The Sports Authority was acquired by Kmart in 1990 and spun off five years later. Kmart's profitability and sales peaked in 1992, and the later decline is attributed to competition with Walmart, Target, and internet shopping.[11] In 1994, Kmart announced they would close 110 stores.[77] Unlike its competitors Walmart and Target, Kmart failed to invest in computer technology to manage its supply chain. Furthermore, Kmart maintained a high dividend, which reduced the amount of money that was available for improving its stores. Many business analysts also faulted the company for failing to create a coherent brand image.

The second Super Kmart Center logo, spelled out as Super Kmart, was used for stores that opened in the late 1990s (1996–2001).
The Big Kmart logo, stylized as BIG Kmart, was used for stores that were opened or renovated in the late 1990s (1997–2002).

In 1997, Kmart launched the Kmart Cash Card as a replacement for the paper gift certificates and to facilitate the return process.[78] In July 1999, Kmart hired SuperValu and Fleming to distribute $3.9 billion worth of food and other related products to all Kmart stores.[79]

In 2000, Kmart and Capital One launched an all-new co-branded MasterCard as a replacement for the private label Kmart credit cards.[80]

Also in 2000, Kmart expanded the Martha Stewart Everyday Garden Collection to include live plants and seeds.[81] Kmart also launched the Martha Stewart Everyday Kitchen, which is a complete line of housewares essentials.[82]

In July 2000, Kmart closed 72 underperforming stores, while opening 20 new Big Kmart stores, converting 12 regular Kmart stores into Super Kmart Center stores, and opening 5 new Super Kmart Center stores.[83] The company announced a planned major restructuring, in which Kmart would invest in new customer check-out and new inventory management technology and other related systems.[84]

2001: Final year before filling for bankruptcy

[edit]

1990–2001: New image

[edit]
The front of the Super Kmart Center store in Cambridge, Ohio (store #3555), as it appears before it was downsized in 2015 and closed in 2018; this location is now Rural King

In 1990, in an effort to update its image, Kmart introduced a new logo.[48] It dropped the old-style italic "K" with a turquoise "mart" in favor of a red block letter K with the word "mart" written in script and contained inside the "K".[49][50] Kmart then began remodeling stores shortly thereafter.[51] This logo was replaced in 2004 with the current one.[52] In 1990, Little Caesars Pizza opened its first in-store Kmart restaurant in Rochester, Michigan[53] (coincidentally, Little Caesars and Kmart were both founded in Garden City, Michigan, in 1959 and 1962 respectively). In 1995, Kmart also tried to reinvent itself by using the short-lived name Today's Kmart.[54]

The Super Kmart Center logo that was used on some stores that opened during 2001.

In 2001, Kmart opened several new Super Kmart stores as part of Kmart's plan to expand their Super Kmart Center store portfolio and make groceries available at stores.[85] However, Kmart having filed for bankruptcy in January 2002, the company was unable to open any new Super Kmart Center stores, and construction was halted on others, no matter how close the stores were to completion. Kmart also signed a $4.5 billion arrangement that year with Fleming, making them the sole food and consumables distributor for the company's stores.[86]

Kmart would be hit with two separate lawsuits by Japanese video game company Sega and retail competitor Target. In February of 2001, Sega would sue Kmart for a claimed failure to pay $2.2 million of $25.9 million for Dreamcast game systems.[87] In August, Target would sue Kmart, claiming that the company's "Dare to Compare" advertising campaign inaccurately compared its own prices with those of Target a majority of the time on in-store signs.[88]

2002–2009: Merger with Sears

[edit]
Kmart's lime green logo that was used only at five prototype locations in 2002

On January 22, 2002, Kmart filed for Chapter 11 bankruptcy protection under the leadership of its then-chairman Charles Conaway and president Mark Schwartz.[89][90] Conaway, who successfully expanded CVS Corporation, accepted an offer to take the helm at Kmart along with a loan of $5 million (equivalent to $8.74 million in 2024). In a scandal similar to that involving Enron, Conaway and Schwartz were accused of misleading shareholders and other company officials about the company's financial crisis while making millions and allegedly spending the company's money on airplanes, houses, boats and other luxuries. At a conference for Kmart employees on January 22, Conaway accepted "full blame" for the financial disaster. As Kmart emerged from bankruptcy, Conaway was forced to step down, and was asked to pay back all the loans he had taken.

After dismissing Conaway and Schwartz, Kmart closed more than 300 stores in the U.S., including all the locations in Alaska, and laid off around 34,000 workers as part of the restructuring process.[91] Kmart introduced five prototype stores with a new logo, layout, and lime green and gray color scheme, one in White Lake, Michigan, and four in central Illinois: (Peoria, Pekin, Morton and Washington).[92] The new layout was touted as having wider aisles and improved selection and lighting, and the city or town's name was featured under the new Kmart logo at the front entrance. However, Kmart could not afford a full-scale rollout.[93] The lime green prototype was abandoned for the new Kmart "Orange" concept that rolled out at several of its locations throughout the United States in 2006.

While Kmart was going through bankruptcy, a significant amount of Kmart's outstanding debt was purchased by ESL Investments, a hedge fund controlled by Edward Lampert. Lampert worked to accelerate the bankruptcy process.[94]

On October 17, 2002, Kmart opened a store in Somers Point, New Jersey, its only new location in the year and ultimately the last of its history.[95][96] The store closed in December 2019.[97]

On January 13, 2003, Kmart closed 326 stores due to a lack of profitability and poor sales.[98]

On May 7, 2003, Kmart emerged from bankruptcy.[99] On June 10, 2003, Kmart began trading on the NASDAQ stock market with the ticker symbol of KMRT with Lampert serving as the chairman and with ESL Investments controlling 53% of the new company for an investment of less than $1 billion.[100][101] Lampert dismissed his concerns that the smaller company would be at a disadvantage, stating "The focus that a lot of people have in retail revolves around sales, but sales without profit do not allow a business to be successful in the long term."[102] He began to improve the company's balance sheet by reducing inventory, cutting costs, and closing underperforming stores. By the fourth quarter of 2003, Kmart posted its first profitable quarter in three years, although it has since returned to an operating loss.

On July 23, 2004, a new Kmart logo featuring a large red "K" with "kmart" in small block letters underneath it was announced.[103] On August 12, 2004, Kmart and E! Entertainment Television announced a new, exclusive, cross-promotional clothing brand called Attention.[104] Attention was launched as a new clothing brand that would be sold only at Kmart stores and would be used to promote E! News Live.[105] Kmart had previously signed a similar deal with the WB Network to have the cast of five WB shows wear Kmart branded clothing during shows.[106]

On November 8, 2004, Kmart launched the Kmart Rewards credit card that is managed by HSBC Bank.[107]

The third Super Kmart Center logo, spelled out as Kmart Supercenter, was only used for printed ads and street signs (2004–2018).
The KDollar logo (November 2004–2012)

On November 17, 2004, Kmart's management announced its intention to purchase Sears for $11 billion.[100] As part of the merger, the Kmart Holding Corporation (the company that owns Kmart) would be transferred to the new Sears Holdings Corporation and Sears would be purchased by the new Sears Holdings Corporation. The new corporation announced that it would continue to operate stores under both the Sears and Kmart brands.[108] Around this time, Kmart changed its logo from a red K with the script "mart" inside, to the same K with the chain's name in lowercase letters below it. Kmart's headquarters were relocated to Hoffman Estates, Illinois, and in 2012 the sprawling headquarters complex in Troy, Michigan, was acquired by the Forbes Company, which owns the nearby upscale mall, Somerset Collection.[109] No concrete plans for redevelopment of the site had been announced.[110]

In 2005, Sears Holdings Corporation introduced the Sears Essentials store format, which would serve as a Kmart-Sears hybrid.[111][112] Sears Essentials stores were freestanding (not located at a shopping mall) stores. In 2006, the company discontinued the Sears Essentials name, and renamed all of the Sears Essentials stores as Sears Grand stores.[113]

Kmart started remodeling stores to the "Orange" prototype in 2005.[114] In 2006, the typical white and blue interior of the stores was changed to orange and brown, and shelf heights were lowered to create better sightlines. The remodeled stores contain an appliance department with Kenmore Appliances and most have hardware departments that sell Craftsman tools, which prior to the merger had been exclusive to Sears stores.[115] Some auto centers left vacant by Penske after Kmart filed for bankruptcy had been converted to Sears Auto Centers.[116]

In July 2009, Sears Holdings opened its first Sears-branded appliance store inside a Kmart.[117] The 4,000 sq ft (370 m2) store-within-a-store opened inside the former garden department of a Birmingham, Alabama, Kmart. It was two-thirds the size of the appliance department in most Sears stores, but larger than the 2,500 sq ft (230 m2) appliance department in remodeled Kmart stores.

In October 2009, it was reported that Kmart and Martha Stewart Living Omnimedia failed to come to a new agreement. This came after Stewart made remarks on CNBC that her line at Kmart had deteriorated, particularly after the Sears merger.[118]

In November 2009, Kmart reported its first year-over-year sales increase of 0.5% since 2005, and only the second such increase since 2001.[119]

2010–2018: Kmart and Sears Holdings

[edit]

During the 2010s, many of Kmart's stores were considered to be outdated and in decaying condition.[120]

On December 27, 2011, Sears Holdings announced that 100 to 120 Sears and Kmart stores would close.[121]

In 2014, news reports indicated that Kmart was liquidating dozens of stores across the United States.[122][123] Kmart's parent company, Sears Holdings Corporation, underwent financial distress throughout the year, sparking an unspecified number of closings of Sears and Kmart locations amid vendors' and lenders' concerns about its liquidity.[124] Along with store closings, measures included the spinning off its Lands' End division, selling most of its stake in Sears Canada, issuing debt and taking on loans that cumulatively put it on track to raise $1.445 billion in cash in 2014.[124] Howard Riefs, a company spokesman who has often spoken on behalf of Kmart, said, "Store closures are part of a series of actions we're taking to reduce on-going expenses, adjust our asset base and accelerate the transformation of our business model."[125][126]

On October 10, 2014, Kmart was a victim of a data breach concerning customers' credit and debit card information.[127] On October 19, Kmart stated, "Based on the forensic investigation to date, no personal information, no debit card PIN numbers, no email addresses and no social security numbers were obtained by those criminally responsible. There is also no evidence that kmart.com customers were impacted. This data breach has been contained and the malware has been removed. I sincerely apologize for any inconvenience this may cause our members and customers."[128]

The original Kmart store in Garden City, Michigan (store #4000), which closed in 2017 (pictured in 2016).[129] It was demolished in 2020.[130]

In April 2016, Kmart announced that it was liquidating 68 stores.[131] The chain announced in September 2016 that 64 more stores in 28 states would close by mid-December 2016.[132] Sears Holdings CEO Eddie Lampert stated in October 2016 that there were not and never had been plans to close the Kmart format and that they are working hard to make it a "more fun, engaging place to shop, powered by our integrated retail innovations and Shop Your Way".[133] In December 2016, at least 25 Kmart locations were targeted for closure in early 2017.[134][135][136]

Located in Greenwich, NY
The smaller Big Kmart #9274 was located in Greenwich, New York, in a former Big N in 2017; this store closed in March 2019 along with 79 other Kmart and Sears stores, this location is now a Big Lots

In January 2017, Kmart announced that 78 more stores would close.[137] Financial analysts began warning that the fate of Sears Holdings was nearing its end.[138] In May 2017, Kmart announced the upcoming closure of 18 more stores.[139] Sears Holdings admitted uncertainty regarding the survival of both Sears and Kmart.[140] In early June 2017, Kmart announced that an additional 49 stores across the U.S. were to be shuttered by September 2017.[141] In early July 2017, Kmart had announced that 35 more stores would close by early October 2017.[142] In late August 2017, Kmart announced another 28 store closures, including the last Rhode Island location, in Cranston.[143] On October 9, 2017, with no closing sale held, the Kmart store in Santa Rosa, California, was destroyed by the Tubbs Fire, adding to the list of closed stores.[144] On October 17, 2017, Kmart announced the liquidation of an unspecified number of locations by late November.[145] On November 3, 2017, it was announced that a further 45 Kmarts (along with 18 Sears stores) were to close, effective by January 2018, including Kmart's last store in Alabama, in Albertville.[146][147]

According to Fortune.com, Kmart and Sears did not run any television advertisements during the 2017 holiday season in order to focus on digital marketing after evaluating the effectiveness of its various marketing efforts.[148]

On January 4, 2018, after yet another disappointing holiday sales season, Kmart announced the liquidation of 64 more stores in the spring of 2018. This included Kmart's only remaining Super Kmart location in Warren, Ohio, which officially discontinued the Super Kmart format.[149] According to MSN Money, Kmart along with sister company Sears had an extremely high chance of disappearing in 2018, such that 2017 would have marked its final holiday season as an independent brand.[150]

Kmart store closing sale in Gillette, Wyoming (store #4863) in 2018; this location is now Hobby Lobby, Ulta Beauty, Shoe Dept. Encore and Harbor Freight Tools

On March 15, 2018, Sears Holdings announced that a small profit was made in the fourth quarter of 2017.[151] However, investors claimed that it was due to tax refunds and that sales were still falling for both Kmart and Sears.[152] On March 26, 2018, CEO Eddie Lampert said, "I'm not sure Kmart on its own could ever be a great retailer," implying that the company was trying to shift to online shopping as opposed to brick and mortar stores.[153] On April 12, 2018, Sears announced plans to close and auction 16 of its Sears stores, and close several more Kmart locations, but did not specify how many. Two known locations on the list were Kmart stores in Brandon, Florida, and Saugus, Massachusetts.[154] In early May, Sears announced the liquidation of several more Kmarts, including the last Kmart in Vermont, in Bennington.[155]

On May 21, 2018, Sears Holdings announced yet another round of liquidation sales in forty Sears and Kmart stores across 24 states.[156] These stores were closed by July 4, 2018. On May 31, Sears Holdings announced the liquidation of an additional 16 Kmart stores and 48 Sears stores,[157] including the last Kmart in Hawaii, in Līhuʻe.[158] The closings announced May 31, 2018, were from among 100 unprofitable stores in Sears Holdings and the remaining 28 unprofitable stores were, "a small group of stores that was pulled from the closing list ... as they are being evaluated further," meaning even more store closings could occur later in the year. Sears Holdings did not disclose those locations at the time.[157] On June 28, 2018, Sears Holdings disclosed 10 of the stores being evaluated and announced they would close by September 2018. Liquidation sales began on the same day.[159] On July 13, 2018, news came through from multiple sources that even more Kmart stores were set to liquidate across the nation.[160][161] On August 23, 2018, it was announced that 13 more stores would close by November.[162]

2018–2019: Second bankruptcy

[edit]
Kmart Cafe Chesapeake Virginia
Former Kmart Cafe in the Chesapeake, Virginia Kmart store (store #3471), in a former Robert Hall Village; this store permanently closed on December 15, 2019, it was one of the last two Kmarts in Virginia

On October 15, 2018, Sears Holdings filed Chapter 11 bankruptcy and announced that it would close 142 stores, including 63 Kmart stores, which included the last Kmart in Arkansas, in Russellville, the last two Kmarts in Georgia, in Covington and Peachtree City, and the last two Kmarts in Kansas, in Kansas City and Salina.[163] Sears Holdings' bankruptcy also marked Kmart's second bankruptcy in 16 years. On November 8, 2018, Sears Holdings announced it would close an additional 40 stores, including 11 Kmart stores.[164] On November 23, 2018, Sears Holdings released a list of 505 stores, including 239 Kmart stores, to be presented for sale in the bankruptcy process while all other stores were holding liquidation sales.[165] However, the stores for sale were not guaranteed to be protected from liquidation in the future. On December 28, 2018, Sears Holdings announced it would close 80 additional stores, including 37 Kmart stores.[166]

In a proposal announced in early January, Sears Holdings planned only to keep 202 Kmart stores along with 223 Sears stores open, assuming that it would survive the bankruptcy process. Most of the proposed locations were in highly populated coastal regions.[167]

On January 15, 2019, when it had appeared that Kmart's parent, Sears Holdings, was preparing to file for Chapter 7 liquidation, the bankruptcy court judge ordered the company to return to the negotiating table and work out a new deal with Eddie Lampert to prevent the liquidation from occurring. A new deal was struck at the last minute that would keep up to 400 Sears and Kmart stores operating.[168] On January 19, 2019, Sears Holdings officially announced that they had won the auction, and that some of the then existing stores were to remain open.[169]

A Big Kmart store in Willow Street, Pennsylvania (store #3810) as it appeared on its last day of operation, April 18, 2021; this was one of the last two Kmart stores in Pennsylvania, this location is now Ocean State Job Lot

On January 24, 2019, a group of unsecured creditors, which included Simon Property Group, filed a motion with the bankruptcy court to overturn the deal Sears Holdings had recently made with Lampert, claiming Lampert had been "engaged in serial asset stripping" of the company at the expense of suppliers and landlords. The creditors had requested that the bankruptcy court rule to liquidate the company instead of allowing reorganization so that the creditors would be able to recover more money that was still owed to them.[170] On January 28, the federal government-operated Pension Benefit Guaranty Corporation announced that they were not in favor of Sears Holdings' current agreement with Lampert since that agreement would create a $1.7 billion funding gap in the employee pension fund, requiring American taxpayers to cover the shortfall.[171] In papers filed on February 1 with the bankruptcy court, ESL "outlined plans to close three Kmart stores per month in 2019" if the court would decide to accept ESL's purchase bid.[172]

In February 2019, it was announced that a U.S. bankruptcy judge approved the sale of the most lucrative part of Sears Holdings to Edward Lampert, allowing the surviving part of the company to remain in business with a combined number of 425 Kmart and Sears stores, at the expense of suppliers and other creditors.[173] The two sister chains became under the control of a new entity called Transform Holdco also known as Transformco.[174]

2019–present: New management and further store closings

[edit]

The sale of 202 Kmart stores to Transform Holdco was finalized in February 2019, with the remaining Kmart locations liquidated to partially pay off Sears Holdings creditors.[175]

In May 2019, it was revealed that Kmart would close its store in Walla Walla, Washington in July 7 after nearly 45 years of service.[176] On August 6, 2019, during a new announcement of store closings, TransformCo added that it "cannot rule out additional store closures in the near term".[177] In October 2019, the closure of 84 Kmart stores was announced.[178] With another wave of closings announced in November 2019, The Wall Street Journal reported that Transformco "would continue to evaluate its retail footprint, suggesting that additional closures are possible".[179] On February 6, 2020, Kmart announced it would close 15 more stores.[180]

On November 21, 2021, Kmart closed its last store in Michigan, the state where the chain originated in 1962.[181] The store, which opened in the early 1990s as a replacement to an older smaller Kmart outlet, was situated in Marshall, Michigan; the chain's first ever location in Garden City had closed in 2017.[182] On December 18, 2021, Kmart shut down its last West Coast location in Grass Valley, California.[183][184]

After the closing in March 2022 of the 33 years old Hamilton, Montana store (which still had the pre-1990 logo on its storefront by the time of its shuttering), there were four Kmart locations left in the country, half of them based in New Jersey.[185][186] On April 16, 2022, Kmart closed down the New Jersey store in Avenel.[187] The other three locations remained opened in Miami, Florida; Westwood, New Jersey; and Bridgehampton, New York.[188] In October 2023, the Westwood location closed after more than 40 years in business, having opened in the fall of 1982.[189][190] This reduced the chain to two mainland U.S. stores in addition to locations remaining in the US. Virgin Islands and Guam.[191]

One-story grey shopping building with "Kmart" signage over the door. The store takes up a corner in the shopping center.
Kmart on Kendall Drive in Miami (store #3074), the last Kmart store in the continental United States; the downsized store occupies the space of its former garden center.

The Bridgehampton, New York location closed on October 20, 2024.[192][193] It had opened in 1999 in the place of a former Caldor store and was able to outlive other Kmart locations due to limited competition from Walmart and Target which were both a 45-minute drive away.[194] The closure left the Miami store as the sole Kmart location in the continental U.S., with 4 others remaining in U.S. territories.[195] Unlike the location that closed in Bridgehampton, the one in Miami is not a full-line Kmart store.[196] The Kmart location in Miami had been downsized in March 2023.[197] Now the size of a CVS Pharmacy or Walgreens location, the last Kmart store in the United States is operating out of its former garden center, offering a limited selection of clothing, appliances, and household goods.[198] The rest of the store's original space is leased to an At Home outlet.[199] This Kmart store, located in the Kendale Lakes area, inaugurated on November 3, 1977.[200][201]

In May 2025, it was announced the Kmart store at the Sunny Isle shopping centre in St. Croix, U.S. Virgin Islands would close in August 2025, due to the lease not being renewed.[202] However, its closure came unexpectedly early, shutting down instead on July 5, 2025. It was the last Kmart location in St. Croix.[203] Two years before, the retailer had closed another St-Croix store in Frederiksted, in a shopping mall that had Kmart as a tenant since its debut on June 30, 1993.[204] In late June 2025, while the Sunny Isle store in St. Croix was still liquidating and its final date approaching, the Virgin Islands Daily News reported that the Kmart location in the Lockhart Gardens shopping center on Saint Thomas would also close on August 16.[205] This leaves chainwide only one location remaining in the Virgin Islands—at the Tutu Park Mall on Saint Thomas, as well as the store in Guam and the small Kmart in Miami.[1][2]

Headquarters

[edit]
The Kales Building in downtown Detroit as shown in 2007, formerly the S.S. Kresge Co. headquarters from 1914 to 1930

The previous owner of Kmart, Sears Holdings Corporation, had its headquarters on Beverly Road in Hoffman Estates, Illinois.[206] In December 2021, Transformco announced that it intended to put its corporate headquarters for sale at the start of the new year.[207] The company now[when?] occupies a different head office in the same city on Trillium Blvd.[208]

The headquarters were formerly located in the Kmart International Headquarters at 3100 W. Big Beaver Road in Troy, Michigan, in Metro Detroit.[209][210] The facility had 23 interconnected modules. Each had three stories, except for one module, which was one story. Based on the layout, Norm Sinclair of DBusiness concluded that it was "a study in inefficiency".[209]

Subsidiaries

[edit]

Current

[edit]
Big Kmart store in Carlisle, Pennsylvania (store #7746), December 2012; it was later converted into a regular Kmart with the current logo, this store closed in December 2018, along with 141 other Kmart and Sears stores, this location is now a U-Haul
  • Kmart is a chain of discount department stores that are usually free-standing or located in strip malls.[citation needed] They carry compact discs (CDs), DVDs, TV shows on DVD, electronics, bedding, household hardware, sporting goods, clothing, toys, jewelry, office supplies, health and beauty products, over-the-counter medications, home decor, and a limited selection of food items. Many also once held garden centers, Jackson Hewitt tax centers, pharmacies, and/or a K-Cafe or delicatessen. Kmart stores range from 80,000–110,000 sq ft (7,400–10,200 m2).[citation needed] Before the mass closures, most of them were either converted to or rebranded as Big Kmart while some were converted into Super Kmart stores.
A Super Kmart Center store in Lorain, Ohio (store #3910) in February 2013; this store closed on September 18, 2016, this location was demolished and is now a Meijer

Former

[edit]
A Kmart Express gas station in Cleveland, Ohio in February 2013, the Super Kmart (store #4966) near it, as well as this Kmart Express, closed in 2014; these buildings were demolished and the location is now a Menards
  • American Fare was a chain of hypermarkets that operated from 1989 to 1994. It was a joint venture involving Kmart, which owned 51 percent of the store, and Birmingham, Alabama-based Bruno's Supermarkets, which owned 49 percent of the stores. The first store opened in Stone Mountain, Georgia, near Atlanta, on January 29, 1989. American Fare's 244,000 sq ft (22,700 m2) of retail space included 74,550 sq ft (6,926 m2) of groceries, 104,000 sq ft (9,700 m2) of general merchandise, and 35,000 sq ft (3,300 m2) of clothing (including apparel, footwear, and accessories). An area in the front of the store housed a music and video store, a food court (including a Taco Bell and TCBY), bank, hair salon, pharmacy and a card store. Charlotte, North Carolina, was home to the second American Fare, which opened on April 1, 1990, with 160,000 sq ft (15,000 m2) of retail space. A third and final store opened in Jackson, Mississippi in August 1990, with plans for a fourth store in Birmingham, Alabama never coming to fruition. In June 1992, Bruno's announced the termination of its partnership with the Kmart Corporation, and that Kmart would assume ownership of the three stores. The three stores closed by May 1994. The Stone Mountain store would be split into two parcels, a Kmart and a Cub Foods store. The building now houses the DeKalb County Board of Education. The Charlotte store was converted to Super Kmart, then a Steve & Barry's, before closing in 2009. It now houses a Verizon call center, and the Jackson store's parking lot became a Carmax in 2007, while the building itself is now owned by Comcast.[211] The American Fare brand is used on some Kmart store-brand consumable products.
  • Big Kmart was a chain of discount department stores that carried everything a regular Kmart carries, but emphasizes home decor, children's clothing, and more food items such as meat and poultry, baked goods, frozen foods and an extended, but limited section of garden produce. Big Kmart stores ranged from 84,000 to 120,000 sq ft (7,800 to 11,100 m2). Big Kmart stores also featured a garden center, a pharmacy, a branch of a local bank, a Jackson Hewitt tax center, an Olan Mills portrait studio, an arcade, a K-Café or Little Caesars Pizza Station, and sometimes a Kmart Express gas station. As noted above, Kmart introduced the Big Kmart brand company-wide when it was introduced in 1997. Some Big Kmart locations were either closed or converted to normal Kmart stores. The final Big Kmart store in Marshall, Michigan closed permanently on November 21, 2021.
  • BlueLight Internet service. In 1999 Kmart began offering a dial-up Internet service called BlueLight, which was eventually spun off as an independent company. BlueLight was initially free and supported by banner ads. BlueLight began limiting the free service in January 2001[212] and was reacquired by Kmart in July 2001, the same month it announced the end of the free service.[213] In 2002 United Online, which also owns NetZero and Juno, bought the BlueLight service after Kmart filed for bankruptcy.[214] In August 2006, Bluelight dropped the banners. In August 2006, the service cost $14.95 a month and had around 165,000 subscribers.
  • Borders was a chain of bookstores acquired by Kmart in 1992. In 1994, Borders merged with the Kmart chain Waldenbooks to form Borders-Walden Group, which was sold in 1995. In February 2011, Borders filed for Chapter 11 bankruptcy and announced plans to liquidate in July after failing to find a buyer to keep the chain's remaining 399 stores in operation. The remaining stores closed in September.
  • Builders Square was a home improvement superstore. In 1997, it was sold to Hechinger, which went out of business in 1999.
  • Designer Depot: A discount clothing store chain operated in Metro Detroit in the 1980s.[215] The first opened in a former S. S. Kresge dime store in St. Clair Shores, Michigan in 1982, selling brand names such as Yves Saint Laurent, Izod Lacoste, and Calvin Klein at discount prices.[216]
  • K-Café was an in-store restaurant that served a fairly standard menu of hamburgers, hot dogs, French fries, grilled cheese sandwiches and Philly cheesesteaks. They also offered a full breakfast menu of baked goods, bagels and egg platters with bacon or sausage, and such snacks as nachos, pretzels, popcorn and ice cream. Hot food items could also be purchased at the deli and eaten in the Deli Café at Super Kmart Center stores. However, K-Café has been discontinued in all of their stores.[when?]
  • KDollar was a chain of discount stores/dollar stores that sold Kmart merchandise at a discount. The stores were often former Kmart or Big Kmart stores. Sears Brands filed for a trademark on the KDollar name on November 6, 2012.[217] The first opened in a former regular Kmart store in Bloomfield Hills, Michigan in 2013.[218] A second KDollar store opened in Waukegan, Illinois.
  • Kmart Chef restaurants were a small chain of free-standing fast-food restaurants owned by Kmart, started in 1967 with the first location on the parking lot of a Kmart in Pontiac, Michigan. The "limited, high-turnover menu" (as Kmart founder S.S. Kresge put it) consisted of hamburgers, French fries, hot dogs, and soft drinks. The Kmart Chef chain folded in 1974 after peaking at 11 locations.[219]
  • Kmart Dental was an in-store dental office located in Kmart stores. There was only one such prototype in a Kmart store, in Miami, Florida. Despite the name, Kmart Dental was never technically owned by Kmart.[220]
  • Kmart Express was a chain of gas stations/convenience stores located in out-parcels at some Kmart and Super Kmart stores, particularly in the Midwest. In the early 2000s, there were plans to expand this concept to most Kmarts, but the plan for more locations was canceled after Kmart's bankruptcy in 2002. The final Kmart Express, in Ionia, MI, closed in 2017.
  • Kmart Food Stores was a supermarket chain founded in 1962. Most Kmart Food locations were paired with Kmart stores, often operated by a local grocery chain but always branded as Kmart Food. The chain was discontinued in the early 1980s.
  • Kwash was an attached-to-store laundromat launched in May 2010. Only one such prototype existed. It was in a former auto bay in Iowa City, Iowa. It featured a separate entrance, laundromat attendants and free wi-fi along with a limited selection of laundry goods available for purchase. The Kwash closed along with the Kmart in 2017.[221]
  • Makro, a Dutch warehouse club chain, operated locations in the U.S. from February 1981 to 1989, in Atlanta, Philadelphia, and the Washington, D.C. suburb of Largo, Maryland.[222] Kmart bought the chain's entire American holdings in 1989, having owned a 49 percent share before.[223] The Makro stores were later converted to Pace or closed in 1990.[224]
  • Office Square was a chain selling office supplies and office furniture which was a spin-off of Builders Square. In 1991, OfficeMax was acquired by Kmart and Office Square was merged into OfficeMax stores.
  • OfficeMax is a chain selling office supplies and office furniture which was acquired in 1991 and sold in 1995. It was acquired by Office Depot in 2013.
  • Pace Membership Warehouse was Kmart's warehouse club brand, until the chain was purchased by Walmart. In 1993, Walmart converted most of the stores into its Sam's Club brand, and sold others to chains such as Bradlees.
  • PayLess Drugs was a chain of drug stores acquired by Kmart in 1985[225] and later sold to TCH Corporation in 1994.[226] The resulting entity, Thrifty PayLess, was acquired by Rite Aid in 1996, which converted all of the PayLess and Thrifty stores into Rite Aid stores in 1999. The PayLess division also owned Bi-Mart, which was spun off along with sister stores such as Pay 'n Save.
  • The Sports Authority was a chain of sporting goods stores which was acquired in 1990 and sold in 1995. The Sports Authority went out of business in 2016.
  • Super Kmart Center (also known as Super Kmart) was a chain of superstores that carried everything a regular Kmart carries, but also had a full grocery section with meat and poultry, baked goods, a delicatessen, garden produce, and fresh seafood. Super Kmart Centers ranged from 140,000 to 190,000 sq ft (13,000 to 18,000 m2). The first store opened in Medina, Ohio on July 25, 1991, which downsized to a regular Kmart before closing for good in 2012. Super Kmart stores also featured a garden center, a video rental store, a branch of a local bank, an arcade, a portrait studio, a Jackson Hewitt tax center, a pharmacy, and usually a deli café or Little Caesars Pizza Station. Many of these services were closed and discontinued in recent years. Several locations also included Kmart Express gas stations, and most had an auto center. Most Super Kmarts were closed during the two rounds of closures in 2002 and 2003, and many had their groceries removed, converting them into regular Kmart locations.[227] A typical Super Center sold around $30 million of merchandise during one fiscal year. In 2015, some stores were converted into a regular Kmart with a concept titled K-Fresh. These stores feature an expanded pantry and a fresh-food department, though these types of items are no longer prepared on-site and are now prepackaged. The deli, butcher and bakery operations were also closed. Kmart gradually closed its Super Kmart stores; the last location was in Warren, Ohio and closed on April 8, 2018. It was replaced by Meijer.[228]
  • U-Pak was a single "no-frills" supermarket which sold items out of boxes instead of on shelves, and featured reduced hours. It opened adjacent to a Kmart on Opdyke Boulevard in Pontiac, Michigan in 1979 and closed less than a month later due to poor sales.[229]
  • Variety Outlet. A closeout chain, typically operated out of closed Kmart stores. The first opened in Rome, Georgia in 1994.[230][231]
  • Waldenbooks was a chain consisting primarily of shopping-mall–based book stores which was acquired in 1984. In 1994, Kmart chain Borders merged with Waldenbooks to form Borders-Walden Group, which was sold in 1995 (the company was subsequently renamed Borders Group, and went out of business in 2011 due to bankruptcy).

Philanthropy

[edit]

Kmart for Kids was the umbrella program for Kmart's philanthropic initiatives. The program had helped children across the country live happier, healthier lives through the support of: March of Dimes, St. Jude Children's Research Hospital, and American Diabetes Association.[232] At one time, Kmart was March of Dimes' number one corporate sponsor, having raised $114 million for the charity over more than 30 years.[233][234]

On July 29, 2008, Don Germano, SVP/GM of Kmart stores, was elected to a five-year term on the national Board of Trustees of the March of Dimes Foundation.[235]

Kmart for Kids had supported St. Jude's Children's Research Hospital through its annual Thanks and Giving campaign, an opportunity for Kmart customers to give thanks for the healthy children in their lives and give to help those who are not. Kmart had been a partner of the campaign since 2006, and as of December 2008, had raised more than $59.2 million (equivalent to $86.5 million in 2024) for St. Jude's.[236] A record $21.9 million (equivalent to $29.6 million in 2024) was donated for the tenth annual fundraising campaign during the 2013 holiday season.[237]

In 2008, Kmart earned the "Outstanding Corporate Citizen" Award for its support of the American Diabetes Association's "Step Out: Walk to Fight Diabetes" program.[238] The tribute honored Kmart for the most well-developed, proactive program in the areas of charity, community development, diversity, philanthropy, and associate development. In 2008, Kmart became a national sponsor of "Step Out: Walk to Fight Diabetes" and over the past two years, Kmart's customers and associates have raised approximately $1.5 million (equivalent to $2.34 million in 2024) through its in-store campaigns.

Environmental record

[edit]

On May 9, 2007, Kmart was penalized $102,422 (equivalent to $155,000 in 2024) for violations of federal hazardous waste, clean water, emergency planning and preparation regulations at 17 distribution centers.[239] Kmart corrected the violations by preparing and implementing spill-prevention control and countermeasure plans, applying for appropriate storm-water permits, complying with hazardous-waste-generator requirements, and submitting reports to state and local emergency-planning and response organizations informing them of the presence of hazardous substances.[240] The Environmental Protection Agency also accused Kmart of not maintaining adequate information and failing to act in accordance with hazardous-waste-storage and disposal requirements.[241] For instance, the EPA reported having discovered improperly labeled oil-storage drums at a location in Falls, Pennsylvania.[241]

Kmart promoted battery recycling.[242] In 1990, Kmart proposed spending about $80 million (equivalent to $169 million in 2024) on full-page newspaper advertisements offering to recycle junk batteries for $2 (equivalent to $4.00 in 2024) each.[243]

Data breaches

[edit]

October 2014

[edit]

In October 2014, Kmart reported that malware was present on some of its in-store payment systems in early September at a number of stores.[244]

September 2017

[edit]

Between September 26 and October 12 of 2017, malware were installed in the computers operated by a service provider that provided service for sears.com and kmart.com ecommerce sites in which the credit card information of 100,000 customers were exposed via a malicious script. The breech was not publicly announced until April 2024.[245][246]

June 2018 incident

[edit]

In June 2018, Sears Holdings reported that hackers were able to steal credit card numbers at several Kmart stores by accessing the store payment systems by a "viruslike computer code" that was undetectable by then current anti-virus systems.[247]

June 2021

[edit]

An unauthorized party accessed Transformco computer servers between June 3, 2021 and June 15, 2021 that held employee payroll and healthcare information that affected current and past Kmart and other Transformco employees.[248]

Animal welfare concerns

[edit]

In 2012, Mercy for Animals, a non-profit organization working against cruelty to farmed animals, conducted an investigation at Christensen Farms, a pork supplier to Kmart, Walmart and Costco, obtaining hidden-camera footage of pigs confined in small gestation crates and cruelty to piglets.[249] In response, Kmart announced it would begin requiring its pork suppliers to phase out gestation crates.[250]

Racing sponsorships

[edit]

Kmart was a prominent sponsor in NASCAR and the now-defunct CART series. They were a longtime sponsor of Newman/Haas Racing, owned by actor Paul Newman and former racer Carl Haas. Their CART drivers included Nigel Mansell and the father-son duo of Michael and Mario Andretti. Michael Andretti and Mansell won championships under Kmart sponsorship in 1991 and 1993, respectively. When Michael Andretti moved to Formula One in 1993, Kmart sponsored his McLaren for the season. The store also sponsored the NASCAR-sanctioned Kmart 400 at Michigan and North Carolina Speedway. Lake Speed garnered Kmart's first win in NASCAR in 1988 at the Darlington Raceway. Kmart sponsored three-time champion Darrell Waltrip in 1999 and 2000, his last two full-time seasons. Most recently, in NASCAR, the store sponsored Boris Said's #60 No Fear Ford Fusion in 2006.[251][252]

Operations in Puerto Rico

[edit]

On November 25, 1959, the S. S. Kresge chain expanded with the opening of its first store in Puerto Rico, a 17,678 square-foot unit at the 65th Infantry shopping center in San Juan, the capital city of the island.[253][254] More Kresge stores would go on to open on the island in the 1960s, such as the Santa Rosa Plaza store in Bayamón in February 1960,[255] the Norte shopping center store in Santurce in March 1962,[256] the Centro del Sur shopping center store in Ponce in June 1962,[257] and the Reparto Metropolitano shopping center store in Río Piedras in February 1965.[258] In June 1987, Kresge stores in Puerto Rico would begin to cease operations with the closure of the Centro del Sur store that month, and another store also in Ponce.[259]

On October 21, 1964, the Kmart chain also expanded beyond the contiguous United States, opening a 69,000 square-foot unit at the San Patricio Plaza shopping center in Guaynabo.[260][254] On December 31, 1967, a fire would consume the building where the Kmart was located at the San Patricio Plaza shopping center leaving it completely destroyed. The fire, which caused an estimated loss of $1.5 million, was started in some boxes and sheets of cardboard partitioning walls behind the store outside the building.[261] On January 30, 1969, the destroyed Kmart store, after being re-built, would re-inaugurate at the shopping center.[262]

On May 3, 1979, a new Kmart store would open in the town of Trujillo Alto on the island. The new store, of 84,180 square-feet, was the chain's third in Puerto Rico, and increased the total number of Kmart stores to 1,532 located in the United States and Canada.[263]

On May 28, 1983, the Kmart Corporation had completed the acquisition of five lease contracts for stores previously operated by the Barker's chain on the Island, and hoped to reopen them by September or October of that year. Kmart had paid approximately $2.1 million to obtain the leases for these stores. The Barker's chain had closed 16 stores it had in Puerto Rico earlier that year due to financial problems of its parent company, KDT Industries. KDT had filed for bankruptcy and began auctioning the leases of the Barker's stores that had closed.[264] Three new Kmart stores would open in October of that year on the island, two stores in Bayamón at the Plaza Río Hondo shopping mall and the Rexville Plaza shopping center, and one in Arecibo at the Plaza del Atlántico shopping mall. This would increase the number of people Kmart employed on the Island to more than 700 in the 12 stores it now had, which included six Kmart stores and six Kresge stores.[265]

On April 23, 1998, it was reported that the Kmart chain would be investing more than $25 million on the Island before the end of the year to convert eight of its 21 stores at the time into Big Kmart stores and that two new stores would be opening, one in Vega Alta and another in the Plaza Las Américas shopping mall. James Mesenbring, Kmart regional manager for Puerto Rico and the Caribbean, said that four new Big Kmart stores would be inaugurated, located at the Montehiedra Town Center, Los Colobos shopping center in Carolina, and the Plaza Guayama shopping mall and in Cayey. These joined the Big Kmart stores that already operated at the San Patricio Plaza and in the Las Catalinas Mall in Caguas. In July of that year, the stores in Vega Baja, Bayamón (Plaza Río Hondo), Caguas (Rafael Cordero Avenue) and Trujillo Alto would also be converted. Meanwhile, in August of that year, they planned to open the Big Kmart in Vega Alta at a cost of $10 million, and in November they would inaugurate the two-level store in Plaza Las Américas, which would be the chain's largest store on the Island with 144,000 square-feet of space.[266]

Between 2002 and 2003, three Kmart stores on the island closed due to the bankruptcy, one in Humacao in 2002, one in 2003 at the Juncos Plaza shopping center in Juncos, and another store in Cayey that same year.[267][268]

In 2011, the Kmart chain opened a new smaller store concept at 8,000 square-feet named "Kmart Express" at the Plaza Carolina shopping mall in Carolina, this was short lived.[269] Through the 2010s and beyond the Kmart chain began to downsize in Puerto Rico with various closures. In 2015, two Kmart stores closed, one at the Señorial Plaza in San Juan,[270] and one in Vega Baja.[271] In December 2018, three Kmart stores announced their closure, the San Patricio Plaza store, the Las Catalinas Mall store, and one in the town of San Germán.[272] In August 2019, five more Kmart stores announced their closure, located in Aguadilla, Trujillo Alto, Cayey, Carolina, and Yauco.[273] In November 2019, another five Kmart stores announced their closure, located in Fajardo, Juana Díaz, Arecibo, Plaza Río Hondo, and Vega Alta.[274] In January 2020 another store located at the Plaza Centro Mall in Caguas announced its closure.[275] In June 2020, two more Kmart stores were announced to be closing, one located at Plaza Guaynabo shopping mall in Guaynabo, and one in Ponce.[276] And in December 2020, two more Kmart stores announced their closure, located in the Rexville Town Center in Bayamón, and the Western Plaza in Mayagüez.[277] On October 15, 2022, after being the only store in the chain left open on the island since 2021, the Plaza las Américas Kmart store announced it was closing permanently, with Kmart entirely ceasing operations in Puerto Rico.[278] Owners of the mall had reportedly been negotiating for Kmart to vacate the building for a new tenant for months, and finally Kmart agreed to move out by that October.[279]

Operation in Guam

[edit]

Kmart has its Guam location in Tamuning.[280] The Kmart in Guam gets American customers as well as tourists from Asian countries. The store opened in May 1995 and has a size of 170,000 square feet.[281][282] As of 2018 the Guam store sold $100,000,000 worth of goods per year, the highest of any existing Kmart at the time, and had the highest customer count of any Kmart store. Because of its distance from competition and a lack of online shopping options in Guam, Lucy Craymer of the Wall Street Journal wrote that the Guam Kmart was in "a retail version of the Galapagos."[283]

International

[edit]

Australia and New Zealand

[edit]
Kmart Australia logo

The first Kmart store in Australia opened in 1969 in Burwood East, Victoria; the site was renovated in 2010 to be a shopping mall known as Burwood One.[284]

Kmart Australia was born out of a joint venture between G.J. Coles & Coy Limited (Coles) and the S.S. Kresge Company (Kresge), with Kresge owning 51% of the common stock in the company and the remaining 49% being owned by Coles. The first New Zealand store opened in Henderson, a suburb of Auckland, in 1988.[285] Kresge later exited this partnership in 1994 selling their ownership in the company to Coles Myer, the successor to G. J. Coles & Coy Limited.[286] Since the dissolution of Coles Myer in 2007, the Australian and New Zealand Kmart stores are owned by Wesfarmers.[287]

Canada

[edit]
Former Kmart store in Bayers Lake, Nova Scotia (Store #5551) shown in 1994; now Canadian Tire

Kmart opened their first store in Canada in Huron Heights, Ontario on March 14, 1963, followed by a second location in Windsor, Ontario on May 9, 1963.

Kmart closed five stores in Greater Montreal in 1983-84.[288] Kresge ceased to exist in Canada in 1994.[289] In December 1997, it was announced that ten of the existing 122 stores were to be closed.[290] However, as a result of Kmart's ongoing financial difficulties, the Canadian division comprising 112 stores was sold to competitor Zellers of the Hudson's Bay Company in May 1998,[291] after which the stores were either closed or converted to Hudson's Bay Company brands, mostly Zellers.[292]

Slogans

[edit]
  • The Saving Place 1960s–1990
  • Your Lowest Price is a Kmart Price 1990–1998

Caribbean

[edit]

In the early 2000s, Kmart tried to expand into Caribbean countries where Wal-Mart and Target had no presence, but ultimately none of the proposed stores advanced beyond the construction stage and none opened by the time Kmart filed for bankruptcy in 2002 when it stopped paying its construction contractors.[293]

Kmart started construction of a Super Kmart in 2001 in Trinidad,[293] but halted it in 2002 when the store was 80 percent complete. There were plans for more stores to be built in Trinidad, as well as in Millennium Heights in Barbados, five stores in the Dominican Republic, and a potential foray into Jamaica.[294]

Europe

[edit]
Kmart in Bratislava, Slovakia, during the early 1990s; this location is now a Tesco

In 1992, Kmart purchased several communist-era department stores in Eastern Europe, including 13 in the former Czechoslovakia that were bought from the former Czechoslovak government.[295] Many of these outlets were quite profitable, with the Bratislava location setting a single-store sales record for the company. In March 1996, due to its troubles in the U.S., the Kmart Corporation announced that it had agreed to sell the six Kmart stores in the Czech Republic and the seven in Slovakia to Tesco of Britain for about $117.5 million (equivalent to $236 million in 2024), to focus on its core operations in North America.[296][297]

Mexico

[edit]
Super Kmart Center, Cuernavaca, México in 1995; this location has been a Mega hypermarket since 1997

In the 1990s, Kmart opened four stores in Mexico, in partnership with the Mexican retailer Liverpool.[298][299] All were supercenters located in suburbs of Mexico City. About half of the store area was devoted to groceries, and this part of the stores resembled those in the US with some adjustments to the local market.[300] These plus an unfinished store were sold in 1997 to the Mexican hypermarket chain Mega (part of Comercial Mexicana)[301] and remain open under that name, except the store in Tlalnepantla, which was demolished in 2004 to build a Costco.

Singapore

[edit]

Plans to open Kmart stores in Singapore were announced in August 1993.[302] Known as K-Mart Metro,[303] it was a joint venture with Metro (Private) Limited, a subsidiary of Metro Holdings of Singapore.[304]

Its first Kmart outlet in the country, a 9,700-square-metre (104,000 sq ft) store in the Marina Square Shopping Center,[305][306] opened on May 19, 1994.[303] A second Kmart outlet in Lucky Plaza opened in July 1994.[303] A third and final store was opened in Century Square in October 1995.[307] Kmart had a total of three stores in Singapore when the company announced in June 1996 that they plan to close all three stores.[308][309]

Management

[edit]

See also

[edit]

References

[edit]
[edit]
Revisions and contributorsEdit on WikipediaRead on Wikipedia
from Grokipedia
Kmart is an American retail company that originated as the S.S. Kresge Company, founded in 1899 by Sebastian Spering Kresge as a five-and-dime store chain in Detroit, Michigan, and pioneered discount department stores with its first Kmart location opening in Garden City, Michigan, in 1962.[1] The chain rapidly expanded, reaching over 2,000 stores by 1981 and becoming a dominant force in low-price general merchandise retailing, including apparel, home goods, and consumer electronics, while introducing innovations like the Kmart Supercenter in 1991 and early e-commerce via BlueLight.com in 1999.[2] At its peak in the late 1990s, Kmart was the second-largest U.S. retailer by sales, but faced intense competition from Walmart and Target, leading to financial struggles, a Chapter 11 bankruptcy filing in 2002, and the closure of hundreds of stores.[3] In 2005, Kmart merged with Sears, Roebuck and Co. to form Sears Holdings, which was later acquired by ESL Investments in 2019 and reorganized under Transformco, a private entity focused on integrating retail, real estate, and digital services.[2] As of November 2025, Kmart operates three remaining stores: one small outpost in Miami, Florida, and two in U.S. territories (Guam and the U.S. Virgin Islands), with no full-sized locations left in the continental United States since the 2024 closure of the last full-size store, shifting emphasis to online sales and brand licensing.[4][5]

History

Founding and Early Development

The S.S. Kresge Company was established in 1899 by Sebastian Spering Kresge in Detroit, Michigan, as a five-and-dime store selling merchandise primarily priced at five or ten cents.[1] Kresge, a former salesman, had previously partnered with John G. McCrory in 1897 to open similar variety stores in Detroit and Memphis, but the partnership dissolved after two years, leaving Kresge with the Detroit operations.[6] By 1912, the company was formally incorporated with 85 stores across the United States and annual sales exceeding $10 million.[1] The early business model of S.S. Kresge emphasized low prices and fixed pricing on a wide range of everyday goods, such as housewares, clothing, and toys, drawing direct inspiration from the successful five-and-dime format pioneered by F.W. Woolworth.[7] This approach appealed to budget-conscious urban and suburban shoppers, enabling steady growth; by 1924, the chain had expanded to 257 stores with sales reaching $90.2 million, surpassing 200 locations well within the 1920s.[8] In response to post-World War II suburban expansion and the rise of discount retailing, S.S. Kresge shifted toward larger-format stores, launching the first Kmart discount department store on March 1, 1962, in Garden City, Michigan—a suburb of Detroit.[1] Under President Harry B. Cunningham, this 112,000-square-foot prototype offered broader merchandise selections at reduced prices compared to traditional Kresge variety stores, marking a pivotal adaptation to changing consumer habits and automotive-driven shopping patterns.[6] The initial rollout was strong, with 18 Kmart stores operational by the end of 1962 and corporate-wide sales totaling $483 million that year.[1] Kmart's early momentum continued through the decade, with sales surpassing $1 billion by 1966 from 162 Kmart locations alongside remaining Kresge outlets.[1] A key milestone came in 1970, when the chain reached its 500th store, reflecting rapid scaling amid the broader transition to discount formats that would define the company's future growth.[1]

Expansion and Peak Era

Kmart experienced explosive growth following the opening of its first discount store in Garden City, Michigan, in 1962, expanding from just 18 stores by the end of that year to 162 by 1966. This rapid proliferation continued through the 1970s, with the company opening a record 271 new Kmart stores in 1976 alone, bringing the total to 1,206 by the decade's close. By 1981, Kmart had reached a milestone with the opening of its 2,000th store, culminating in 2,055 locations across the United States, Canada, and Puerto Rico by year's end. During the 1980s, the chain further innovated by planning the Super Kmart Center format, which combined traditional discount retailing with full-service grocery sections; initial development began in the mid-1980s, though the first stores would not open until 1991.[2][6][9] In the competitive landscape of discount retailing, Kmart established itself as the dominant player during the 1970s, outpacing emerging rivals like Walmart and Target through aggressive expansion and broad merchandise offerings. The company held a leading position in the U.S. discount sector, capturing a substantial market share that positioned it as the largest discount retailer until the early 1990s. To differentiate its product lines and appeal to fashion-conscious consumers, Kmart introduced celebrity-endorsed private-label brands in the late 1970s and 1980s, starting with the Jaclyn Smith sportswear collection in 1985 and followed by the Martha Stewart partnership in 1987, with the Everyday line launching in 1997.[10] These initiatives helped bolster brand loyalty and sales in apparel and home goods.[6][11][2][3] Financially, Kmart achieved significant milestones during this era, reporting annual sales of $16.53 billion for fiscal year 1981, reflecting its scale as one of America's top retailers. The company diversified beyond physical stores by venturing into catalog sales in the 1980s and scouting international opportunities, building on its established presence in Canada since the 1960s. By 1987, sales had climbed to $25.6 billion, with profits reaching $692 million, underscoring the peak of its operational success. That same year, Kmart fully divested from its legacy five-and-dime operations by selling the remaining U.S. Kresge and Jupiter stores to McCrory Corporation, allowing the company to concentrate resources on its core discount format.[6][12][13]

Rebranding and Challenges

In the early 1990s, Kmart launched a major "new image" campaign aimed at revitalizing its brand and competing more effectively with rivals like Walmart and Target. This initiative included extensive store redesigns, such as brighter lighting, wider aisles, and improved layouts to enhance the shopping experience, alongside an updated logo featuring a more modern, bold font in red and blue. Starting in 1994, the company shifted to an "everyday low pricing" strategy, eliminating frequent sales promotions in favor of consistently lower prices on staple goods to attract budget-conscious shoppers. To bolster its marketing efforts, Kmart expanded its product lines in apparel, home goods, and private-label brands while enlisting high-profile celebrity endorsers. In 1999, the company signed comedian Rosie O'Donnell as a spokesperson for its children's clothing line, leveraging her popularity from her talk show to appeal to families and generate media buzz. These moves were part of a broader push to reposition Kmart as a family-friendly retailer with trendy, affordable options, though they coincided with aggressive store expansions that strained resources. By 2001, Kmart's debt had ballooned to approximately $3.5 billion, exacerbated by overexpansion and mounting operational costs. Facing intensifying competition and inventory management issues, Kmart filed for Chapter 11 bankruptcy protection on January 22, 2002, marking the largest U.S. retail bankruptcy at the time with assets and liabilities each exceeding $10 billion. The filing stemmed from excess inventory buildup, pricing pressures from competitors, and failure to adapt quickly enough to changing consumer preferences. As part of the restructuring, Kmart sold non-core assets, including its sports apparel distribution centers and real estate holdings, and shuttered 284 underperforming stores across 39 states, reducing its footprint by about 20%. Kmart emerged from bankruptcy in April 2003 after court approval of its reorganization plan, which included debt reduction to around $1.4 billion and a streamlined store network of approximately 1,400 locations. The process involved renegotiating vendor contracts and implementing cost-cutting measures, such as centralized purchasing and inventory controls, to restore financial stability and focus on core discount retailing.

Merger with Sears and Decline

In late 2004, Kmart Holding Corporation, under the control of hedge fund manager Edward S. "Eddie" Lampert, announced its acquisition of Sears, Roebuck and Co. in a transaction valued at approximately $11 billion.[14] The deal was completed on March 24, 2005, forming Sears Holdings Corporation as the parent company for both chains, with Lampert serving as chairman and Sears CEO Alan Lacy as vice chairman and chief executive officer.[15] This merger created the third-largest U.S. retailer at the time, with combined annual sales exceeding $55 billion and nearly 3,500 stores, aiming to leverage complementary strengths—Kmart's discount format and Sears' established brands and real estate assets—to compete against rivals like Walmart.[16] Sears Holdings pursued operational synergies, including shared supply chains and centralized procurement, with expectations of achieving up to $300 million in annual cost savings from merchandise sourcing efficiencies.[17] However, integration efforts faltered due to cultural clashes, incompatible IT systems, and mismatched store formats, preventing the realization of anticipated benefits and contributing to persistent underperformance.[18] By fiscal 2008, the company reported a sharp decline in operating income to $302 million from $1.6 billion the previous year, driven by falling comparable store sales at both Kmart (down 4.7%) and Sears Domestic (down 4.0%), amid broader retail sector pressures.[19] The onset of the Great Recession in 2008 exacerbated these challenges, prompting Sears Holdings to announce the closure of 100 to 120 underperforming Sears and Kmart stores in December of that year to stem losses and conserve cash.[20] For instance, eight Kmart locations were among the initial wave of 12 stores shuttered in late 2008, with further closures following as consumer spending contracted.[21] In response to intensifying competition from e-commerce giants, Sears Holdings shifted toward digital and smaller-format retail strategies, including the relaunch of enhanced online capabilities for Kmart through integrated platforms with Sears.com.[22] The merger era marked the beginning of Kmart's sustained decline, with the chain's U.S. store count falling below 1,300 by the end of fiscal 2010 to 1,307 locations across 49 states and U.S. territories.[23] This contraction reflected broader failures to modernize inventory management and adapt to shifting consumer preferences, leaving Kmart increasingly marginalized within the combined entity.[24]

Bankruptcies and Store Closures

On October 15, 2018, Sears Holdings Corporation, the parent company of Kmart, filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York, with Kmart operating as a key subsidiary amid the proceedings.[25] The filing was precipitated by mounting debts exceeding $5 billion and failure to secure alternative financing, following years of operational struggles after the 2005 merger with Sears.[26] The court quickly approved $300 million in debtor-in-possession financing from existing lenders to support ongoing operations during the restructuring process.[27] In February 2019, a bankruptcy judge approved the sale of Sears Holdings' assets to ESL Investments, a hedge fund led by Edward Lampert, for approximately $5.2 billion, allowing the retention of about 425 stores and 45,000 employees under the newly formed Transformco.[28] As part of the post-bankruptcy optimization, Transformco announced the closure of 96 additional locations by early 2020, including 45 Kmart stores, to streamline costs and focus on viable operations.[29] The COVID-19 pandemic further intensified financial pressures on Transformco, accelerating store rationalization efforts as reduced foot traffic and supply chain disruptions compounded existing challenges.[30] Between 2020 and 2021, at least 45 Kmart stores were shuttered, contributing to a significant reduction in the chain's footprint amid widespread retail sector turmoil.[31] Liquidation continued into 2023, with closures including the last Kmart in New Jersey (Westwood) and other mainland locations, as Transformco prioritized asset efficiency.[32] In 2024, the final full-sized Kmart store on the mainland United States, located in Bridgehampton, New York, closed on October 20, marking the end of large-format operations in the continental U.S.[33] By the end of 2024, following the Bridgehampton closure, Kmart's presence in the continental U.S. was limited to a single small-format store in Miami, Florida, alongside a full-sized store in Guam and multiple locations in the U.S. Virgin Islands.[34] In 2025, additional closures occurred in the U.S. Virgin Islands, including the Sunny Isle store in St. Croix and the Lockhart Gardens store in St. Thomas, reducing the territory's locations to one.[35]

Current Corporate Status

Following the 2019 liquidation of Sears Holdings, Kmart has been owned and operated as a subsidiary by Transformco, a privately held company focused on retail and real estate assets. Transformco is headquartered in Hoffman Estates, Illinois.[36] As of November 2025, Kmart maintains a minimal physical presence in the United States, with three stores operational: a remnant small-format location in the Kendale Lakes Shopping Center in Miami, Florida; a full-sized store in Tamuning, Guam; and a store in Tutu Park Mall in St. Thomas, U.S. Virgin Islands.[37][38][34] The company has shifted primarily to online retail through Kmart.com, which continues to offer a range of products including electronics, clothing, and home goods, supplemented by limited in-store pickup options at the remaining locations.[39] Kmart's international operations are entirely separate, with Kmart Australia having been sold to Wesfarmers in 2007 as part of the Coles Group acquisition and now operating independently as a successful discount retailer under Wesfarmers' ownership.[40] Financially, Kmart generates minimal revenue from its limited retail activities, with Transformco emphasizing the liquidation of intellectual property, real estate holdings from former stores, and licensing deals rather than expansion.[41]

Operations

United States and Territories

Kmart's traditional big-box stores, typically spanning approximately 95,000 square feet, ceased operations on the U.S. mainland following widespread closures, with the last full-size location shuttering in October 2024.[42] In their place, the chain maintains a single small-format store in Miami, Florida, at the Kendale Lakes Plaza, which operates in a downsized space of about 20,000 square feet focused on essential goods such as groceries, pharmacy items, and basic apparel.[43] This compact model emphasizes convenience and core discount offerings to serve local communities amid the brand's overall contraction. In U.S. territories, Kmart sustains fuller operations with one big-box store in Tamuning, Guam, which remains open 24 hours daily and functions as a key retail hub for groceries, apparel, and household essentials in the island market.[44] There are no locations operating in Puerto Rico as of November 2025. In the U.S. Virgin Islands, one store at Tutu Park Mall on St. Thomas continues to operate, offering groceries, apparel, and household essentials, though its pharmacy closed in September 2025.[38][45] These territorial stores represent the chain's most robust physical presence outside the mainland, supporting local economies through everyday low pricing on necessities.[4] The product assortment in these U.S. and territorial stores centers on discounted clothing, home goods, and toys, with apparel lines featuring affordable basics and seasonal items from in-house brands.[46] Following the 2005 merger with Sears, select stores integrate Sears-branded products, such as tools and appliances, to broaden offerings while maintaining Kmart's discount focus on value-driven essentials like bedding and small electronics.[39] As of November 2025, Kmart operates zero full-size stores on the mainland, one small-format location there, and two stores in U.S. territories, reflecting a minimal footprint under parent company Transformco.[4] The supply chain for these remaining outlets relies on a limited network of distribution centers, including facilities in Georgia and Illinois, to handle inventory for the reduced store base and online fulfillment.[47]

Australia and New Zealand

Kmart Australia was established in 1969 as a joint venture between Australian retailer G.J. Coles & Coy Limited and the U.S.-based S.S. Kresge Company, the parent of the original Kmart chain, with the first store opening in Burwood East, Victoria.[48] In 1978, Coles acquired full control of the Australian operations by exchanging stakes, solidifying its ownership.[49] Following the 1985 merger of Coles and Myer to form Coles Myer Ltd., the company continued to expand Kmart's presence, and in November 1994, Coles Myer bought back the remaining 21.5% stake held by Kmart Corporation (U.S.), achieving complete independence from the American parent.[50] This separation marked Kmart Australia as a distinct entity, operating without ties to the U.S. Kmart, which faced its own challenges leading to its current limited status under Transformco.[2] In July 2007, Wesfarmers acquired the Coles Group—including Kmart, Target, and Officeworks—for A$22 billion in Australia's largest corporate takeover at the time, integrating it into its portfolio. Following the 2018 demerger of Coles supermarkets as a standalone listed company, Kmart became a core part of Wesfarmers' Kmart Group division, alongside Target, functioning as an independent retail operation focused on the Australasian market.[51] As of 2025, Kmart operates 323 stores across Australia and New Zealand in a hypermarket format, with sales floor areas typically ranging from 3,000 to 15,000 square meters to accommodate broad merchandise ranges.[52] Of these, approximately 295 are in Australia, emphasizing suburban and regional locations for accessibility, while the 28 New Zealand stores, including a new large-format outlet at Westgate in Auckland spanning 6,700 square meters, cater to similar demographics.[53][54] The chain specializes in affordable general merchandise, particularly homewares, apparel, and toys, positioning itself as a value-driven retailer for everyday essentials and lifestyle products.[48] Its in-house Anko brand, launched in 2013, has become a flagship private label, offering budget-friendly clothing, home decor, and accessories designed and sourced primarily in Asia, accounting for over 80% of Kmart's product offerings and driving customer loyalty through trendy, low-cost items.[55] Recent expansions have bolstered Kmart's digital presence, with online sales penetration reaching around 15% of total revenue by FY2025, supported by omnichannel strategies like click-and-collect from stores and partnerships with platforms such as Catch for broader e-commerce reach.[56] Although traditionally non-food focused, Kmart has explored adjacent growth through collaborations, including limited grocery-adjacent offerings via third-party integrations on its app and website to complement core categories.[57] Annual sales for Kmart alone exceeded A$7.5 billion in FY2025, contributing to the Kmart Group's total revenue of A$11.4 billion, reflecting steady 3% comparable sales growth amid economic pressures.[58] Cultural adaptations have been key to Kmart's success in the region, including high-profile Boxing Day sales events that draw massive crowds for deep discounts on seasonal items, aligning with local holiday traditions.[59] The retailer also emphasizes local sourcing for select products, such as apparel and homewares produced in Australia and New Zealand, to reduce supply chain risks and appeal to community preferences for domestic manufacturing.[48]

Other International Markets

Kmart's operations in Canada began in the 1990s but were short-lived under the brand. In 1998, Hudson's Bay Company acquired Kmart Canada's 122 stores for $240 million and merged them with its 298 Zellers discount stores to form a stronger competitor against Walmart.[60][61] The Kmart name was phased out immediately, with stores rebranded as Zellers. By 2011, Hudson's Bay sold the leases for most Zellers locations to Target Corporation, leading to conversions that completed by 2013.[62] Target Canada operated until 2015, when it discontinued all 133 stores due to ongoing losses exceeding $2 billion, marking the full exit of former Kmart sites from major discount retail under any related branding.[63] In Europe, Kmart made a brief foray during the early post-communist era. In 1992, the company acquired 13 department stores in the former Czechoslovakia, which became the Czech Republic and Slovakia after the country's split in 1993.[2] These stores faced challenges adapting to local consumer preferences and economic conditions, including resistance to American-style discounting.[64] Due to unprofitability, Kmart sold the operations in 1996.[2][65] Kmart entered Mexico in 1994 through a joint venture with El Puerto de Liverpool, opening four supercenter stores in suburban areas near major cities.[66] The partnership aimed to test big-box retailing in the region but struggled with market saturation and operational costs. In 1997, Kmart and Liverpool sold the venture to Controladora Comercial Mexicana for an undisclosed amount, ending direct involvement.[66][2] The acquired stores continued briefly under the Super Kmart name before closing by the early 2000s. Similarly, Kmart's Singapore expansion occurred in 1994 via a joint venture with Metro (Private) Limited, resulting in three stores at locations including Marina Square and Tampines' Century Square.[67][68] The outlets operated for only a few years amid intense local competition and small market size before the partnership dissolved in 1996.[2][3] Kmart also maintained a presence in the Caribbean, operating stores in Bermuda and the Bahamas through the 1990s and into the 2000s.[69] Most locations in Bermuda and the Bahamas closed during the early 2000s as part of broader international retrenchment.

Corporate Structure

Management and Leadership

Kmart was founded in 1899 by Sebastian S. Kresge as the S.S. Kresge Company, establishing a chain of five-and-dime variety stores that laid the foundation for its later discount retailing operations. Kresge served as the company's leader until his death on October 18, 1966, at the age of 99.[70] In 1959, Harry B. Cunningham was appointed president of S.S. Kresge, where he spearheaded the shift to a discount store model by studying competitors and developing a strategy for larger, low-price formats.[1] Under Cunningham's leadership, the first Kmart discount department store opened in Garden City, Michigan, in 1962, marking the beginning of rapid expansion with 17 additional stores that year alone.[71] Cunningham remained president until 1972, overseeing the opening of approximately 150 Kmart stores annually and transforming the company into a major retail force with sales reaching nearly $15 billion by 1980.[3] Following Kmart's Chapter 11 bankruptcy filing in January 2002 and emergence in May 2003, Julian Day served as president and chief executive officer from January 2003 to September 2004, focusing on reorganization and cost-cutting measures during a transitional period.[2] The 2005 merger with Sears, Roebuck and Co. created Sears Holdings Corporation, where Eddie Lampert, founder of ESL Investments, assumed the role of chairman from 2005 to 2019 and briefly as CEO from 2013 to 2018. Lampert's influence, exerted through ESL's significant ownership stake, shaped corporate strategy, including decisions to divest real estate and other assets, which a 2019 lawsuit by Sears Holdings alleged stripped the company of over $2 billion in value, contributing to its operational decline.[72] Alan J. Lacy, former CEO of Sears, transitioned to vice chairman and CEO of Sears Holdings upon the merger but served only briefly until 2006, amid ongoing integration challenges.[73] After Sears Holdings filed for bankruptcy in October 2018, its assets were acquired in February 2019 by an ESL Investments affiliate, forming the private entity Transform Holdco LLC (rebranded Transformco), which ended the public company structure and consolidated board control under ESL's oversight with a streamlined, non-public board dominated by Lampert's interests. Under Transformco, executive leadership remains minimal as of 2025, with Lampert continuing as chairman and Omar Khan serving as CEO; strategic direction is influenced heavily by his hedge fund's priorities, focusing on asset management rather than expansive retail operations.[74][75] The company operates with a small team of functional executives handling remaining brands like Kmart and Sears Home Services.[76]

Headquarters and Subsidiaries

Kmart's original headquarters were established in Troy, Michigan, in 1972 at 3100 West Big Beaver Road, when the S.S. Kresge Company relocated from Detroit to a new facility serving as the central hub for its growing discount store operations.[2] This location functioned as the corporate base until 2006, when Kmart, following its 2005 merger with Sears, Roebuck and Co., moved its headquarters to Hoffman Estates, Illinois, to consolidate with Sears' existing campus. The Troy site, spanning over 40 acres and known internally as "Fort Kresge," was sold in 2012 to the Forbes Company and later demolished in 2023-2024 for redevelopment. Under its current parent company, Transformco, Kmart maintains minimal headquarters operations at 5407 Trillium Boulevard in Hoffman Estates, Illinois, with a significantly reduced corporate staff reflecting the company's scaled-back retail footprint of about 5 U.S. stores as of 2025.[36][4] Transformco, formed in 2019 to acquire Sears Holdings assets, oversees these limited functions from the site, which it sold in 2023 to Compass Datacenters for redevelopment into a data center amid ongoing restructuring.[77][78] Kmart currently operates without major subsidiaries, instead relying on brand licensing agreements for online retail through platforms like kmart.com and select international territories, managed directly by Transformco.[1] In contrast, its international operations, such as Kmart Australia Pty Ltd, function independently; established in 1969 as a joint venture with G.J. Coles & Coy (with S.S. Kresge holding 51% ownership), it was fully divested by the U.S. parent in 1978 and later acquired by Wesfarmers in 2007 via its purchase of the Coles Group, operating over 300 stores in Australia and New Zealand today.[2][48] Among former subsidiaries, Builders Square represented Kmart's entry into home improvement retailing, acquired in 1984 as Home Centers of America and rebranded as a warehouse-style chain with 168 locations by the mid-1990s.[2][79] Facing declining sales, Kmart sold Builders Square in 1997 to Hechinger Company, which operated it until full closure in 1999.[2][80] Pace Membership Warehouse, a bulk discount club founded independently in 1983, was acquired by Kmart in 1989 for $322 million, expanding to about 165 locations focused on membership-based sales of groceries and general merchandise.[81][6] Kmart divested Pace in 1994 amid competitive pressures from rivals like Sam's Club, with many sites converted or sold off.[82] Borders, originating from Kmart's 1984 acquisition of Walden Book Company for $295 million, grew into a major bookstore chain through the integration of the Borders bookstore concept acquired in 1992.[83][2] To streamline operations during financial difficulties, Kmart spun off the Borders-Walden Group as an independent public company in 1995 via an initial public offering, retaining no ongoing ownership.[84] Kmart acquired PayLess Drug Stores in 1985 for $500 million, operating as a chain of drug stores primarily in the western United States, before selling it to TCH Corporation in 1994, after which it merged into Thrifty PayLess and was later acquired by Rite Aid.[85] In 1990, Kmart purchased The Sports Authority, a chain of sporting goods superstores, which expanded under its ownership before being sold in 1995.[2] Kmart also acquired a controlling interest in OfficeMax, an office supplies and furniture retailer, increasing its stake to over 90 percent by 1991, and divested it in 1995.[2] Additionally, in 1999, Kmart launched BlueLight.com, a dial-up internet service initially provided for free and supported by advertising, which was spun off as an independent company, reacquired amid financial challenges, and sold in 2002 following bankruptcy.[1]

Marketing and Culture

Advertising Campaigns

Kmart's advertising campaigns have long emphasized value and urgency through in-store tactics and memorable slogans, helping to build its brand during its expansion in the mid-20th century.[86] One of the most iconic elements was the Blue Light Special, an in-store discount alert system introduced in 1965 by a store manager in Fort Wayne, Indiana, who used a flashing light to promote slow-moving merchandise like wrapping paper.[87] The program expanded nationwide within months, featuring a mobile cart with a strobe light and siren that signaled limited-time deals, often announced over the intercom with the phrase "Attention Kmart shoppers."[88] It became a cultural staple, running for over 25 years before discontinuation in 1991 amid efforts to reposition the brand away from discount perceptions.[87] The feature was briefly revived in 2001 as part of a $25 million marketing push, complete with themed music and 20-minute sales on brand-name items, and again in 2015 to evoke nostalgia and drive traffic.[89][90] Kmart's slogans reinforced its discount positioning, with "The Saving Place" prominently used from the 1960s through the 1990s to highlight affordable everyday goods.[86] In the 1990s, the chain shifted to taglines like "Your Lowest Price is a Kmart Price" to underscore competitive pricing. In Australia (operated separately by Wesfarmers), Kmart adopted "Low prices for life" in its campaigns, emphasizing consistent value across product lines.[91] Celebrity partnerships brought prestige to Kmart's offerings, starting with the 1997 launch of the Martha Stewart Everyday line, which included bed, bath, and paint products sold exclusively at the retailer.[92] The collaboration, which generated significant revenue for Martha Stewart Living Omnimedia, was extended multiple times but ended in 2009 after failed renewal talks, with Kmart citing declining royalties.[93] In the 2010s, Kmart stocked Katy Perry Collections footwear, featuring playful designs like platform heels and sandals that aligned with the singer's bold aesthetic and appealed to younger shoppers seeking affordable trendy styles.[94][95] Post-2010, Kmart embraced digital marketing with humorous social media campaigns to highlight shipping perks and fuel savings, such as the 2013 "Ship My Pants" ad, which amassed over 10 million views in a day by playing on double entendres to promote free delivery.[96] These efforts, including follow-ups like "Big Gas Savings," went viral on platforms like YouTube, repositioning Kmart as a fun, value-driven option amid e-commerce competition.[97]

Sponsorships and Promotions

Kmart has been actively involved in motorsports sponsorships, particularly in NASCAR during the late 20th and early 21st centuries. The company served as the title sponsor for the Kmart 400 race at Michigan International Speedway from the 1990s through the early 2000s, enhancing brand visibility among racing enthusiasts.[98] In addition, Kmart backed prominent drivers, including those racing the No. 66 Big Kmart Ford in the NASCAR Winston Cup Series such as Darrell Waltrip and Todd Bodine, contributing to the team's competitive presence in events like the early 2000s races.[99] Beyond NASCAR, Kmart supported the IndyCar series in the 1990s through partnerships with teams such as Newman/Haas Racing, aligning its marketing efforts with high-profile events like the Indianapolis 500 to appeal to a broader demographic.[100] The retailer also extended involvement to the ARCA series during the late 1990s and early 2000s, sponsoring entries that participated in developmental racing to build grassroots brand loyalty.[101] In the realm of philanthropic promotions, Kmart established a significant partnership with St. Jude Children's Research Hospital starting in 2006, integrating fundraising into its retail operations through in-store campaigns and customer donations. This collaboration raised over $100 million by 2016, with continued efforts pushing the total to more than $116 million by 2019, primarily via the Thanks and Giving program that ties purchases to support for pediatric cancer research.[102][103] These initiatives often featured promotional tie-ins, such as special product sales where a portion of proceeds benefited the hospital, fostering customer engagement while advancing charitable goals. Kmart's in-store events and promotions have emphasized accessible shopping during peak seasons, with layaway programs serving as a cornerstone for holiday preparations since the early 2000s. These no-money-down options allowed customers to secure items early, avoiding end-of-year rushes, and were heavily promoted through television spots highlighting family-friendly benefits like stress-free gifting.[104] Holiday specials further amplified this, including campaigns that encouraged early planning with incentives tied to seasonal purchases, reinforcing Kmart's role as an affordable retail destination. In Australia (operated separately by Wesfarmers), Kmart has engaged in sports promotions through merchandise collaborations, particularly with the Australian Football League (AFL) since the 2020s. The retailer offers official AFL apparel, such as team jerseys and accessories priced affordably to attract fans, creating promotional tie-ins that boost in-store traffic during the season.[105] Similarly, Kmart has promoted cricket via Big Bash League product lines, including team jerseys sold at low prices to capitalize on the sport's popularity and drive sales among sports enthusiasts.[106] These efforts align with broader advertising themes like "Expect More. Pay Less.," briefly referencing slogans to integrate promotions seamlessly.

Controversies and Issues

Data Breaches

In October 2014, Kmart experienced a significant data breach when malware infected its point-of-sale (POS) systems, compromising credit and debit card information from transactions at its stores. The intrusion, which began in early September and was detected on October 9, 2014, involved malicious software that scraped track data from the magnetic stripes of payment cards during checkout. No personal identification information, such as Social Security numbers, email addresses, or debit PINs, was affected, and the company contained the breach by removing the malware and notifying affected customers and card issuers.[107][108] Kmart faced another POS system compromise in May 2017, marking the second such incident in three years and highlighting ongoing vulnerabilities within Sears Holdings, its parent company at the time. Hackers deployed undetectable malware that targeted card data in select stores, leading to unauthorized transactions on affected cards; however, the adoption of EMV chip-and-PIN technology since the 2014 breach limited the exposure to magnetic stripe data only. The exact number of impacted cards remained undisclosed, but the company swiftly isolated the systems, enhanced monitoring, and advised customers to monitor their accounts.[109][110] A separate incident in late September 2017 involved the exposure of customer data through a third-party service provider, [24]7.ai, which handled online chat support for Kmart and Sears websites. Between September 27 and October 12, 2017, malware on the provider's platform allowed unauthorized access to information from online orders, including names, email addresses, phone numbers, and physical addresses for approximately 100,000 customers across both retailers; a subset also had partial payment card details compromised. Kmart was notified in March 2018, promptly investigated, and offered credit monitoring to potentially affected individuals.[111][112] In June 2021, Transformco, the entity managing remaining Sears and Kmart operations post-bankruptcy, disclosed a network intrusion affecting employee data. An unauthorized actor accessed the company's systems from June 3 to June 15, 2021, potentially via phishing, exposing sensitive information such as Social Security numbers, financial account details, and health insurance data for current and former employees. The breach did not impact customer data, and Transformco responded by notifying affected individuals, providing identity theft protection services, and strengthening employee training on phishing awareness.[113] Following these incidents, Kmart and its affiliates implemented remedial measures, including the widespread rollout of EMV-compliant POS systems after 2014 to reduce reliance on vulnerable magnetic stripe data, along with improved antivirus detection and network segmentation. The 2014 breach resulted in multiple class-action settlements, including a $5.2 million agreement with affected banks and credit unions to cover reissuance costs and fraud losses, approved by an Illinois federal court in 2017. No major regulatory fines were imposed, but these events underscored persistent cybersecurity challenges amid Sears Holdings' financial struggles.[114][110]

Environmental and Welfare Concerns

In 2025, Kmart Australia faced legal scrutiny over allegations of misleading consumers regarding the sustainability of its cotton products. The retailer advertised certain cotton items, such as bedding and apparel, as made from "100% sustainably sourced cotton" on its New Zealand website from August 2023 to October 2024.[115] New Zealand's Commerce Commission investigated and determined the claim was potentially misleading, as the cotton was sourced from a mixed supply chain combining "Better Cotton" (a sustainability initiative) with conventional cotton, preventing verifiable guarantees of full sustainability.[115] The Commission issued a formal warning to Kmart, requiring removal of the claims from e-commerce platforms, though it noted that only courts could confirm a breach and reserved the right for further action if similar conduct recurred.[115] This incident highlighted broader greenwashing risks in retail, where unsubstantiated environmental assertions can erode consumer trust.[116] Kmart Australia has also drawn environmental criticism for selling seasonal products that pose risks to wildlife. In October 2025, conservation groups urged the retailer to discontinue fake plastic spider webs used for Halloween decorations, citing entanglement hazards to birds in suburban areas.[117] Wildlife rescuers reported cases of small birds, including honeyeaters and magpies, suffering injuries to wings and legs from the synthetic webs draped on trees and fences, with fragments potentially leading to ingestion.[117] BirdLife Australia advocated for alternatives like wool-based decorations to mitigate plastic pollution and support local farmers, emphasizing the product's contribution to avian decline amid Australia's biodiversity challenges.[117] On welfare fronts, Kmart Australia encountered significant controversy in 2025 over potential forced labor in its supply chains. The Australian Uyghur Tangritagh Women’s Association (AUTWA) initiated federal court proceedings against Kmart, seeking preliminary discovery of documents to investigate links between the retailer's products and Uyghur forced labor in China's Xinjiang region.[118] The action targeted suppliers like the Jiangsu Guotai Guosheng garment factory, amid UN reports of mass internment, forced detention, and labor exploitation of Uyghurs under brutal conditions.[118] AUTWA president Ramil Chanisheff stated, “We’re demanding answers from Kmart so we know whether its actions live up to its words about addressing forced labour risks in its supply chain.”[118] The case underscored limitations in Australia's Modern Slavery Act 2018, which mandates corporate reporting but imposes no penalties or import bans on tainted goods.[118] Kmart Australia denied the allegations, asserting no sourcing from forced labor-linked factories and expressing disappointment in the litigation after 12 months of engagement with AUTWA.[119] The company highlighted its Ethical Sourcing Program, operational for over 15 years, which includes third-party audits, site visits, and public disclosure of its factory list—the first among Australian retailers—to identify and mitigate modern slavery risks, including forced labor.[119] As of November 2025, the court case remained at the discovery stage with no final ruling, prompting calls for stronger regulatory enforcement to ensure supply chain transparency.[118] In September 2025, the Australian Privacy Commissioner determined that Kmart Australia violated the Privacy Act 1988 by deploying facial recognition technology (FRT) in more than 80 stores to combat refund fraud. The technology captured facial images and biometric data from customers at self-checkout kiosks without obtaining meaningful consent or demonstrating necessity, breaching Australian Privacy Principles on collection, use, security, and disclosure of personal information. The investigation, spanning three years, found that Kmart failed to conduct adequate privacy impact assessments and retained data longer than necessary. Although Kmart ceased using FRT in stores by November 2023, the ruling emphasized the risks of biometric surveillance in retail environments and called for stricter guidelines. No monetary penalties were issued, but the decision may influence future regulatory actions on emerging technologies.[120][121]

References

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