Kmart slashes 22,000 jobs

DISCOUNT chain Kmart will close 284 of its 2,114 stores and cut 22,000 jobs as part of its reorganisation under bankruptcy protection, resulting in a charge of $1.1bn to $1.3bn. The closings represent about 13% of Kmart stores. The chain employes a total of about 250,000 employees.

The stores to be closed include 271 Kmart discount stores and 12 Kmart Supercentre retail outlets in 40 states, and one Kmart store in Puerto Rico. The closings are expected to enhance the retailer's cash flow by $550m.

Kmart filed for voluntary Chapter 11 bankruptcy protection under America's bankruptcy laws on 22 January after intense competition from rivals Wal-Mart Stores and Target and weak holiday sales left the retailer strapped for cash.

At the time of its bankruptcy filing, Kmart said it would close underperforming stores. The company hopes to emerge from bankruptcy in July 2003.

Shares of Kmart rose as much as 19 cents, or almost 15%, to $1.47 in early New York Stock Exchange trading before pulling back to trade 4 cents higher at $1.28.