Who Owns Kmart and Is the Retailer Going Out of Business?
Kmart will only have three stores open in the U.S. Who owns Kmart and is the once popular retailer going out of business? Here's what consumers can expect.
April 12 2022, Published 9:36 a.m. ET
Kmart was once a popular discount retailer in the U.S. and had over 2,400 retail locations in the country. However, the company has been in the news lately for closing down its stores. Who owns Kmart and is the retailer going out of business?
S.S. Kresge founded Kmart in 1899. The company was initially called S.S. Kresge Company and listed on the NYSE in 1918. It changed its name to Kmart in 1977.
Kmart has been facing tough competition.
Retail has always been a hyper-competitive and low-margin business. Kmart has been facing tough competition from retail giants like Walmart and Target. The competition in the retail industry has only intensified amid rising e-commerce penetration.
As more users gradually pivot towards online shopping for low prices and ease, retail companies have been facing the heat. The COVID-19 pandemic was also an almost death blow for small retail companies.
Kmart has filed for bankruptcy twice.
Kmart’s revenues peaked at $37 billion in 1993. Since then, the revenues have tumbled because the company had to shut stores. In 2002, the company filed for bankruptcy. The same year Walmart became the second-largest U.S. retailer, ahead of Kmart.
In 2005, Kmart and Sears merged and the combined entity was called Sears Holdings Corporation. However, the business combination didn't pay off and in 2018, Sears announced bankruptcy, which saddened the company’s customers as well as the then President Donald Trump.
How many Kmart stores are open in the U.S.?
At the beginning of April, Kmart had four stores in the U.S. The company is shutting the store in Avenel, N.J., which will reduce its store footprint to three. Kmart has a store each in Long Island, New Jersey, and Miami. Sears has also closed most of its stores in the U.S.
Is Kmart going out of business?
Kmart is almost out of business in the U.S. when it comes to physical retail. However, it still has a strong presence in Australia. The company is transforming into a marketplace and provides an option to buy online. Kmart might struggle to compete with Amazon, which is the largest e-commerce company in the U.S.
Why owns Kmart?
Kmart was owned by Sears Holdings. However, after its bankruptcy, Edward Lampert’s holding company Transformco bought Sears and owns Sears and Kmart now. The company hasn’t been able to “transform” Kmart and Sears as the name may suggest.
People have fond memories of Kmart.
A lot of users on social media platforms like Twitter have shared fond memories associated with Kmart. However, the happy memories couldn't help prevent the near demise of the once flourishing discount retailer.
Many struggling businesses like GameStop and AMC Entertainment saw buying interest from retail traders. These companies capitalized on the mania and sold shares in a flurry. As a result, AMC’s balance sheet looks a lot better than it did in 2020. GameStop is now a debt-free company looking for a turnaround under the stewardship of Ryan Cohen.
As for Kmart and Sears, the support from buyers with a cherished history hasn’t transformed into financial gains. Bed Bath & Beyond, another fellow struggling retailer, is also looking for redemption after Cohen invested in the meme stock.
Why did Kmart fail?
Why Kmart failed would be a case study in itself. The company couldn't identify a target audience, went about acquiring other businesses that later failed, and didn't invest much in technology. Kmart and Sears will go down in history as examples of two once profitable and popular retail businesses that didn't survive amid rising competition from both physical and online retail.