Kmart gets OK to start liquidation at 283 sites
3/21/2002CHICAGO - Liquidation sales can begin as early as today at 283 Kmart stores, the discount chain having obtained U.S. Bankruptcy Judge Susan Pierson Sonderby's permission yesterday for the stores to close.
The move is expected to generate more than $500 million for Kmart Corp.
One of the stores to be closed in is Bowling Green, and another is in Tiffin; they are the only ones in northwest Ohio and southeast Michigan on the list.
The Troy, Mich., retailer, which filed for Chapter 11 bankruptcy protection Jan. 22, has said it may close additional stores here and there, but had no plans to announce another wave of closings.
Kmart has said it expects the savings from store closings to be about $45 million annually after this year.
Judge Sonderby also approved Kmart's request to continue its licensing agreements and pay outstanding accounts with its five major brands: Martha Stewart Living Omnimedia, Inc.; Disney Enterprises, Inc.; G.H. Productions, Inc., which supplies the Jaclyn Smith line; Joe Boxer Licensing LLC; and Kathy Ireland World Wide LLC.
Kmart owes $131,735 to Kathy Ireland, $1.1 million to G.H. Productions, and $12.3 million to Martha Stewart.
Kmart said in court yesterday that the five brands account for roughly $2.7 billion annually in gross sales.
Kmart, which filed for bankruptcy after disappointing holiday sales and a stock dive, has struggled to compete with discount competitors Wal-Mart Stores, Inc., and Target Corp.
Kmart's shares rose 3 cents to $1.68 on the New York Stock Exchange yesterday.