Kmart

Kmart

Type	Subsidiary
Industry	Retail
Founded	1899 (1899) (as SS Kresge Corporation) 1962 (as Kmart chain) 1977 (renamed Kmart Corporation) Garden City, Michigan, U.S.
Founder	S. S. Kresge
Headquarters	Hoffman Estates, Illinois, U.S.
Number of locations	883 (Q2 2016)[1][2]
Area served	United States
Products	Clothing, shoes, linen and bedding, jewelry, beauty products, electronics, toys, food.
Revenue	US$25.146 billion (2015 SHC)[1]
Parent	Sears Holdings
Website	www.kmart.com

Kmart (sometimes stylized as K mart or kmart) is a chain of big box department stores headquartered in Hoffman Estates, Illinois, United States. The chain purchased Sears for $11 billion in 2005, forming a new corporation under the name Sears Holdings Corporation.^[3] The company was founded in 1962 and is the third largest big box chain in North America, behind Walmart and Target,^[4] with stores in the U.S., Puerto Rico, the U.S. Virgin Islands, and Guam (which houses the world's largest Kmart).^[5] It also used to operate stores in Canada, Mexico, and Eastern Europe. As of January 30, 2016, the company operated a total of 941 Kmart stores^[1][6] in 49 states, Guam, Puerto Rico, and the U.S. Virgin Islands, including 934 discount stores, averaging 95,000 sq ft (8,800 m²), and a Super Center, averaging 170,000 sq ft (16,000 m²).^[1]

Kmart became known for its "Blue Light Specials": they occurred at surprise moments when a store worker would light up a mobile police light and offer a discount in a specific department of the store, while announcing the discounted special over the store's public address system. At the height of Kmart's popularity, the phrase "Attention Kmart shoppers!" entered into the American pop psyche, appearing in films and other media such as Troop Beverly Hills, Six Days Seven Nights, Rain Man, Beetlejuice, Madea Goes to Jail and Dawn of the Dead.

Kmart's world headquarters was located in Troy, Michigan, in Metro Detroit, but since the purchase of Sears, it has been relocated to Hoffman Estates, Illinois in the Chicagoland area. Kmart also exists in Australia and New Zealand (see Kmart Australia), although it now has no relation to the American stores except in name, after U.S. equity in the Australian business was purchased in the late 1970s.

History

Early history

S. S. Kresge, the founder of the company that would become Kmart, met variety store pioneer Frank Woolworth while working as a traveling salesman and selling to all nineteen of Woolworth's stores at the time.^[7] In 1897 Kresge invested $8,000 (equivalent to $228 thousand in 2016) saved from his job in joint ownership with his friend John McCrory of a five and dime store in Memphis, to which they added another in downtown Detroit the following year; these were the first S.S. Kresge stores.^[8][9][10] After two years of partnership, he paid McCrory $3,000 (equivalent to $85.5 thousand in 2016) and gave up his share in the Memphis store for full ownership of the Detroit store, and formed the Kresge & Wilson Company with his brother-in-law, Charles J. Wilson.^[9][10]

In 1912, Kresge incorporated the S.S. Kresge Corporation with eighty-five stores. The company was first listed on the New York Stock Exchange on May 23, 1918. During World War I, Kresge experimented with raising the limit on prices in his stores to $1 (equivalent to $16.00 in 2016). By 1924, Kresge was worth approximately $375 million (equivalent to $5.19 billion in 2016) and owned real estate of the approximate value of $100 million (see Farid-Es-Sultaneh v. Commissioner, 160 F.2d 812 (2d Cir. 1947)). Early century growth remained brisk, with 257 stores in 1924 growing to 597 stores operating in 1929. Kresge retired as president in 1925. The Great Depression reduced profitability and resulted in store closings, with the number reduced to 682 in 1940. After the war shopping patterns changed and many customers moved out of the cities into the suburbs. The Kresge company followed them and closed and merged many urban stores so that by 1954 the total number of stores in the US had declined to 616.

1960s–1970s

Under the leadership of executive Harry Cunningham, S.S. Kresge Corp. opened the first Kmart store on March 1, 1962, in Garden City, Michigan,^[11] just four months before the first Walmart opened. This store is still in operation as a Big Kmart store. Eighteen Kmart stores opened that year. Kmart Foods, a now-defunct chain of Kmart supermarkets, opened in that decade. Company founder Kresge died on October 18, 1966.^[12]

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. During the 1970s, Kmart put a number of competing retailers out of business. Kresge, Jupiter and Kmart stores had their main competition from other variety chains such as Zayre, Ames, Hills and those 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 Corporation changed its name to Kmart Corporation.

1980s

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

Kmart experimented with co-branding in 1985, when the in-store cafeteria at the store in Canton, Michigan, was converted to a Wendy's.^[13][14]

Until November 1990, when it was passed by Walmart, Kmart was the second largest retailer in the US, after Sears.^[15] During the 1980s, the company's fortunes began to change; many of Kmart's stores were considered to be outdated and in decaying condition. 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.

The original Blue Light Special, first introduced in 1965,^[16] was retired in 1991.^[17] The company brought back the Blue Light Special in 2001, but again discontinued it in 2002. The concept was briefly revived in 2005, though Kmart at that time had no plans to use the concept long-term.^[18] Blue Light Specials were revived again in 2009 on Saturdays, offering surprise hour-long sales on selected merchandise but was discontinued again. Blue Light Specials were revived once again in November 2015.^[16]

1990–2002: New image

In 1990, in an effort to update its image, Kmart introduced a new logo. 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. Kmart then began remodeling stores shortly thereafter, but most were not remodeled until the mid-1990s, and some have not been completely renovated yet. This logo was replaced in 2004 with the current logo. In the very early 1990s, Little Caesars Pizza opened its first in-store Kmart restaurants. Coincidentally, both Little Caesars and Kmart were founded in Garden City, Michigan in 1959 and 1962 respectively. In the early 1990s, Kmart also tried to reinvent itself by using the short-lived name Today's Kmart.

The company also began 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 actor/director and producer Penny Marshall became among the company's most recognized spokespersons.

Kmart Super Center (Super Kmart) opened a 147,000 sq ft (13,700 m²) location in 1991 in Medina, Ohio, featuring a full-service grocery store and general merchandise.^[19] However, this location was downsized in 2011 and was one of a number of Kmarts closed in early 2012 due to dismal Christmas 2011 sales.^[20] The second ground-up Kmart Super Center opened in Montrose, Ohio, featuring the chain's first full-scale video rental center and a carryout Chinese menu.^[21] This location has also closed. Most Kmart Super Centers range in size from 140,000 sq ft (13,000 m²) to 190,000 sq ft (18,000 m²). Current locations feature in-house bakeries, fresh meats and seafood, and a full delicatessen.^[22]

Big Kmart opened in Chicago, Illinois, on April 23, 1997. The format focuses on home fashions, children's apparel and consumables (Pantry).^[22] Most Kmart stores were remodeled to this format during the 1990s and most of them are still open, but some have been converted into regular Kmart stores.

The Sports Authority was acquired by Kmart in 1990 and spun off 5 years later.

Kmart's profitability and sales peaked in 1992 and have since declined due to competition with Walmart, Target, and Internet shopping.^[23] In 1994, Kmart closed 110 stores. Unlike its competitors Walmart and Target, it had failed to invest in computer technology to manage its supply chain. Furthermore, Kmart maintained a high dividend, which reduced the amount of money available for improving its stores. Many business analysts also faulted the corporation for failing to create a coherent brand image.

2002–09: Collapse and merger with Sears

On January 22, 2002, Kmart filed for Chapter 11 bankruptcy protection under the leadership of its then-chairman Chuck Conaway and president Mark Schwartz.^[24][25] Conaway, who had had success building up the CVS Corporation, had accepted an offer to take the helm at Kmart along with a loan of $5 million (equivalent to $6.59 million in 2016). 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 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 Kmart stores in Alaska, and laid off around 34,000 workers as part of the restructuring process.^[26] Kmart introduced five prototype stores with a new logo, layout, and lime green and gray color scheme, one in White Lake Township, Michigan, a quasi-rural community near Detroit, Michigan, and four in central Illinois: (Peoria, Pekin, Morton and Washington). 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. The lime green prototype was abandoned for the new Kmart "orange" concept that rolled out at nine test stores throughout the U.S.

While the company was in 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. On May 6, 2003 Kmart emerged from bankruptcy protection as Kmart Holdings Corporation. On June 10, 2003, it began trading on the NASDAQ with the ticker symbol KMRT with Lampert as chairman and ESL Investments controlling 53% of the new company for an investment of less than $1 billion.^[27][28] Lampert dismissed 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."^[29] 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 November 17, 2004, Kmart announced its intention to purchase Sears for $11 billion.^[27] As a part of the merger, the Kmart Holdings Corporation would change its name to Sears Holdings Corporation. The new corporation announced that it would continue to operate stores under both the Sears and Kmart brands.^[30] Around this time, Kmart changed its logo from a red K with the script "mart" inside to a red block letter 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.^[31] No concrete plans for redevelopment of the site have been announced.

In 2005, the company began renovating some Kmart stores and converting them to the Sears Essentials format, only to change them later to Sears Grands.^[32] The lighting was updated from a 2-by-2 to a 2-by-1 pattern in all Kmart stores.

Kmart started remodeling stores to the "Orange" prototype 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.^[33] Some auto centers left vacant by Penske after Kmart filed for bankruptcy have been converted to Sears Auto Centers.^[34] 280 stores as of 2009 have been remodeled to this new prototype. For most of these stores, Kmart retired the "Big Kmart" logo and replaced it with the current logo. In some of the larger stores the old logo is still in use.

In July 2009, Sears Holdings opened its first Sears-branded appliance store inside a Kmart.^[35] The 4,000 sq ft (370 m²) store-within-a-store opened inside the former garden department of a Birmingham, Alabama, Kmart. It is 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.^[36]

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.^[37]

2010–present: Continued decline

On December 27, 2011, after poor holiday sales, Sears Holdings announced that 100 to 120 of Sears/Kmart stores would close.^[38]

In 2014, news reports indicated that Kmart was closing dozens of stores across the United States.^[39] Kmart's parent company Sears Holdings Corporation underwent financial distress throughout the year, sparking an unspecified number of closings to Sears and Kmart locations amid vendors and lenders concerns about its liquidity.^[40] 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.^[40] Howard Riefs, a company spokesman who has often spoken on behalf of Kmart, has 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."^[41][42]

On October 10, 2014, Kmart was victim of a data breach concerning customers' credit and debit card information.^[43] Kmart confirmed on October 19, "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."^[44]

In January 2015, Kmart agreed to pay $102,048 and other consideration to settle a U.S. Equal Employment Opportunity Commission disability discrimination lawsuit. According to the lawsuit, Kmart offered a job at its Hyattsville, Maryland, store to a candidate with kidney disease on dialysis. The candidate advised the hiring manager that he could not provide a urine sample for the company's mandatory pre-employment drug screening because of his medical condition, and requested a reasonable accommodation such as a blood test or other drug test that did not require a urine sample; Kmart refused to provide an alternative test and denied the candidate employment.^[45]

In April 2016, Kmart announced it was closing 68 stores.^[46] The chain announced in September 2016 that 64 more stores in 28 states would close by mid-December 2016.^[47]

Corporate affairs

Logos

• 
  The Kmart Foods logo used during the 1960s
• 
  Kmart's original logo used until 1990. It is still used at some older stores. This logo was also used by Kmart Australia from 1969 until 1991.
• 
  Kmart's red classic logo (1991–2004). It is still in use at some older Kmart stores.
• 
  Kmart's lime green logo that was only used at five prototype locations.
• 
  Super Kmart logo used primarily in the early 1990s, but was also used for some stores that opened in the early 2000s. This logo was also used in the defunct Mexican Super Kmart's.
• 
  Big Kmart logo
• 
  The second Super Kmart logo, used primarily in the late 1990s.
• 
  Current Kmart logo (2004–present)
• 
  The third Super Kmart logo spelled out as Kmart Supercenter (2004–2016)
• 
  The KDollar logo (November 2004 – 2012)

Mascot

In May 2007, Sears Holdings Corporation named a new mascot and spokesperson for Kmart called Mr. Bluelight. Named after Kmart's well-known "Blue Light Specials", Mr. Bluelight is a talking cartoonish blue light bulb who gives customers ideas to help them make the most of their Kmart experience. Mr. Bluelight has appeared in several television commercials. Specials associated with Mr. Bluelight inside Kmart stores are advertised as "Blue Light Finds" (marked-down merchandise) and "Best of Blue" (higher-end products, often brand-name). In late 2011, Kmart retired Mr. Bluelight.

Headquarters

The owner of Kmart, Sears Holdings Corporation, has had its headquarters in Hoffman Estates, Illinois in Greater Chicago since 1993 when it moved out of the Sears Tower in downtown Chicago.^[48] Kmart has been in the Hoffman Estates Headquarters since Kmart bought Sears in 2004.

The headquarters used to be located in the Kmart International Headquarters at 3100 W. Big Beaver Road in Troy, Michigan in Metro Detroit.^[49][50] 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".^[49]

Subsidiaries

Current

• Kmart is a chain of discount department stores that are usually free-standing or located in strip malls. They carry compact discs (CD's), DVD's, TV shows on DVD's, 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 stores also have a garden center, a Jackson Hewitt tax center, a pharmacy, and usually a K-Cafe or a deli serving Nathan's Hot Dogs and pizza. Kmart stores range from 80,000–110,000 sq ft (7,400–10,200 m²). Some of these stores were converted into Super Kmart, and most of them were either converted to or rebranded as Big Kmart.
• Big Kmart is a chain of discount department stores that carry everything a regular Kmart carries, but with an emphasis on 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; however, they do not feature a bakery, a delicatessen, or fresh seafood. Big Kmart stores range from 84,000–120,000 sq ft (7,800–11,100 m²). Big Kmart stores also feature 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-Cafe or Little Caesars Pizza station, and sometimes a Kmart express gas station. As noted above, Kmart rolled the Big Kmart brand out almost companywide when it was introduced in 1997. Since the merger with Sears, the branding has been retired, but there are still a lot of remaining Big Kmart stores across the U.S. Some of the smaller stores were converted into regular Kmart stores.

• Kmart Super Center is a chain of superstores that carry everything a regular Kmart carries, but also have a full grocery section with meat and poultry, baked goods, a delicatessen, garden produce, and fresh seafood. Kmart Super Center stores range from 140,000 to 190,000 sq ft (13,000 to 18,000 m²). Stores that were built in the late 1990s are known instead as Super Kmart. Super Center stores also feature 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 cafe or Little Caesars Pizza station. Several also include Kmart Express gas stations, and most had an auto center. Most Kmart Super Centers were closed during the two rounds of closures in 2002 and 2003, and many more had their groceries taken out, converting them into regular Kmart locations.^[51] Some of the surviving Super Kmarts were those in regions without a strong Walmart presence, including Ohio and Michigan. A typical Super Center sells around $30 million of merchandise during one fiscal year. As of mid September 2016 there are two Super Kmart Centers in operation. They are located in Mentor, Ohio (closing December 11, 2016^[47]) and Warren, Ohio.^[52] Some of them were converted into a regular Kmart with a concept called K-Fresh. A Kmart with a K-Fresh features an expanded pantry and a fresh food department. These types of fresh items are no longer prepared on-site and will instead come to the store prepackaged. In addition, The deli, butcher and bakery operations will be shut down.
• KDollar is a chain of discount stores/dollar stores, that sell Kmart merchandise at a discount. The stores are often former Kmart or Big Kmart stores that have been converted to the KDollar concept. Sears Brands filed for a trademark on the KDollar name on November 6, 2012.^[53] The first one opened in a converted Kmart in Bloomfield Hills, Michigan in 2013.^[54] A second KDollar store opened in Waukegan, Illinois.
• K-Café is an in-store restaurant that serves a fairly standard menu of hamburgers, hot dogs, fries and such other sandwiches as grilled cheese and Philly cheesesteaks. They also offer 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. In addition to the cafe's menu, hot food items can also be purchased at the deli and eaten in the Deli Cafe at Super Kmart Center stores. However, K-Café has been discontinued in some stores.

• Kwash is an attached to store laundromat launched in May 2010. Only one such prototype exists. It is in a former auto bay in Iowa City, Iowa. It features a separate entrance, laundromat attendants and free wi-fi along with a limited selection of laundry goods available for purchase.
• Kmart Express is a chain of gas stations/convenience stores that are located in out-parcels at some Kmart and Super Kmart stores, particularly in the Midwestern U.S. In the early 2000s there were plans to expand this concept to most Kmart stores, but the plans for more locations were canceled after Kmart's bankruptcy in 2002.
• K-Fresh is a chain of stores that has expanded pantry and fresh department. The stores are in Big Kmart, and Super Kmart locations that have been converted to the K-Fresh concept. The first one opened in a converted Big Kmart in Norridge, Illinois, while a second one opened at a converted Big Kmart in Kahului, Hawaii. K-Fresh serves as a relaunch of the Big Kmart concept as it was meant to be in the late 1990s.
• Kmart Dental is an in-store dental office that is located in Kmart stores. There is only one such prototype in a Kmart store, which is located in Miami, Florida.

Former

• American Fare was a chain of hypermarkets that opened in January 1989. American Fare was a joint venture between Kmart (which owned 51 percent), and Birmingham, Alabama-based Bruno's Supermarkets. The first store opened near Atlanta, Georgia. 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, bank, hair salon, pharmacy and a card store. Charlotte, North Carolina, was home to the second American Fare, which opened in late 1989 with 160,000 sq ft (15,000 m²) of retail space. A third and final store opened in Jackson, Mississippi. In June 1992, Bruno's announced that its partnership with the Kmart Corporation was being terminated, and that Kmart would assume ownership of the three stores. The Charlotte, NC store was converted to Super Kmart and then closed in 2002.^[55] The American Fare brand is used on some Kmart store brand consumable products.
• Builders Square was a home improvement superstore. In 1997, it was sold to Hechinger, which went out of business in 1999.
• Borders Books was a chain of book stores 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.
• Designer Depot: A discount clothing store chain operated in Metro Detroit in the 1980s.^[56]
• 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 fast foods such as burgers, French fries, hot dogs, and soft drinks. The Kmart Chef chain folded in 1974 after peaking at eleven locations.^[57]
• Kmart Food Stores was a supermarket chain founded in 1962. Most Kmart Food locations were together with Kmart stores, often operated by a local grocery chain but always branded as Kmart Food. The chain was discontinued in the early 1980s.
• Makro, a Dutch warehouse club chain, opened locations in the U.S. in the late 1980s. Kmart bought the chain's entire American holdings in 1989, having owned a 49 percent share before.^[58] The Makro stores were later converted to Pace or closed in 1990.^[59]
• OfficeMax is a chain selling office supplies and office furniture which was acquired in 1991 and sold in 1995.
• 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.
• 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^[60] and later sold to TCH Corporation in 1994.^[61] 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 is a chain of sporting goods stores which was acquired in 1990 and sold in 1995.
• U-Pak. A "no frills" supermarket which sold items out of boxes instead of on shelves, and featured reduced hours. The only one opened adjacent to a Kmart on Opdyke Boulevard in Pontiac, Michigan in 1979 and closed less than a month later due to poor sales.^[62]
• Variety Outlet. A closeout chain, typically operated out of closed Kmart stores. The first opened in Rome, Georgia in 1994.^[63][64]
• Waldenbooks was a chain of primarily 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.)
• 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 dropped the free service in February 2001 and was reacquired by Kmart in July 2001. In 2002 United Online, which also owns NetZero and Juno, bought the BlueLight service after Kmart filed for bankruptcy. In August 2006, Bluelight dropped the banners. In August 2006, the service cost $14.95 a month and had around 165,000 subscribers.

Philanthropy

Kmart for Kids is the umbrella program for Kmart's philanthropic initiatives. The program helps 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.^[65] Kmart is March of Dimes' number 1 corporate sponsor, having raised $114 million for the charity over more than 30 years.^[66][67]

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.^[68]

Kmart for Kids supports 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 has been a partner of the campaign since 2006 and as of December 2008 had raised more than $59.2 million (equivalent to $65.2 million in 2016) for St. Jude's.^[69] A record $21.9 million (equivalent to $22.3 million in 2016) was donated for the tenth annual fundraising campaign during the 2013 holiday season.^[70]

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.^[71] The tribute honors 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 $1.76 million in 2016) through its in-store campaigns.

Environmental record

On May 9, 2007, Kmart was penalized $102,422 (equivalent to $117 thousand in 2016) for violations of federal hazardous waste, clean water, emergency planning and preparation regulations at 17 distribution centers.^[72] 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.^[73] 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.^[74] For instance, the EPA reported having discovered improperly labeled oil storage drums at a location in Falls, Pennsylvania.^[74]

Out of concern for the environment, Kmart promoted battery recycling.^[75] In 1990, Kmart even proposed spending about $80 million (equivalent to $145 million in 2016) on full-page newspaper advertisements offering to recycle junk batteries for $2 (equivalent to $4.00 in 2016) each.^[76]

In 2012, Kmart and Sears began allowing customers who are members of their Shop Your Way Rewards program to receive receipts by e-mail, eliminating paper waste and cutting down on the usage of ink.^[77]

Animal welfare concerns

In 2012, Mercy for Animals, a non-profit organization working against cruelty to farmed animals, conducted an infiltration 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.^[78] In response to Mercy For Animals' infiltration, Kmart announced it would begin requiring its pork suppliers to phase out gestation crates.^[79]

Racing sponsorships

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. 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. K-Mart 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.^[80][81]

International

Canada

Kmart was also once a major presence in Canada, with its first Kresge store opening in 1929. Kmart closed 5 Montreal stores and several other Quebec stores in 1983 due to the company restructuring. 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, after which the stores were either closed or converted to Hudson's Bay Company brands, mostly Zellers.

Slogans

• The Saving Place 1960s-1990
• Your Lowest Price is a Kmart Price 1990-1998

Australia and New Zealand

Kmart Australia was born out of a joint venture between G.J Coles & Coy Limited (Coles) and S.S. Kresge Company, with Kresge owning 51% of the common stock in the company. The first Australian store opened in 1969, and stores later opened in New Zealand. Kresge later exited this partnership. The Australian and NZ Kmart stores are owned by Wesfarmers.

Europe

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. One of those stores was the old MAJ department store on Národní Třída in Prague. Many of these outlets were quite profitable, with the Bratislava location setting a single store sales record for the company. But Kmart's larger troubles in the U.S. caught up with its European operations later in the decade. In March 1996, 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 P.L.C. of Britain for about $117.5 million (equivalent to $178 million in 2016), to focus on its core operations in North America.

Mexico

Also in the 1990s, Kmart opened four stores in Mexico, in partnership with the Mexican retailer Liverpool. All were supercenters, and the locations were all 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.^[82] These plus an unfinished store were sold in 1997 to the Mexican hypermarket chain Mega (part of Comercial Mexicana) and remain open under that name, except the store in Tlalnepantla, which was demolished in 2004 to build a Costco.^[83]

Caribbean

In late 2000, Kmart quietly started a major expansion into the Caribbean where Wal-Mart and Target has no presence in many of its countries. Kmart started construction on a Super Kmart in 2001 and was halted in 2002 at 80 percent complete. Plans for more stores in Trinidad were going to be built, as well as Millennium Heights in Barbados, five stores in the Dominican Republic, and a potential foray into Jamaica.^[84] The unfinished Super Kmart store in Trinidad and Tobago is now a Tru Value Supermarket which is the largest supermarket.

CEOs

• Edward S. "Eddie" Lampert
• Herman Darling
• W. Bruce Johnson, Former Interim President and CEO of Sears Holdings Corporation^[85]
• Aylwin Lewis, Former President and CEO of Sears Holdings Corporation
• Bernard Fauber
• Charles Conaway
• Floyd Hall
• Harry Cunningham
• James B. Adamson
• Joseph E. Antonini
• Julian Day
• S. S. Kresge, Founder

See also

• Kmart Australia
• Sears Holdings Corporation

References

Bibliography

• Turner, Marcia Layton (2003). Kmart's Ten Deadly Sins: How Incompetence Tainted an American Icon. Hoboken, New Jersey: John Wiley & Sons. ISBN 978-0-471-43593-8. 

External links

Wikimedia Commons has media related to Kmart.

• Official website (corporate)
• Official website (online Store)
• Official website (mobile online store)
• KmartDesign.com Microsite