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News > Fortune 500
Kmart's store sales might cost jobs
Report: Retailer could terminate as many as 1,200 positions stemming from stores sold to Home Depot.
August 20, 2004: 10:07 AM EDT

NEW YORK (CNN/Money) - Kmart Holdings Corp.'s sale of 13 stores to home-improvement retailer Home Depot Inc. could cost as many as 1,200 jobs, according to a report published Friday.

According to its recently amended deal with Home Depot (HD: Research, Estimates), Troy, Mich.-based Kmart said it will sell no fewer than 13 and possibly up to 19 stores to Home Depot for $288.5 million.

The Detroit Free Press, quoting Kmart spokesman Steve Pagnani, said the Kmart employees being laid off will receive no severance pay but will receive benefits owed to them such as unused vacation time.

Kmart on Thursday identified the stores being sold to Home Depot, the report said. The first three stores to close later this month are in Hanover, Pa.; New Milford, Conn., and Champaign, Ill.

Other stores set to close in October are in Broomhall, Pa.; Tempe, Ariz.; Huntington Beach, Orange, Seaside, and Thousand Oaks, Calif.; Coconut Grove and Jacksonville Beach, Fla., and Levitown, N.Y.

The 13th store, in Dallas, has been vacant since 2003, the report said.

Home Depot owns leases on the other nine stores for $114 million, the report said, and is expected to close on up to six more leased stores by the end of August.

Kmart emerged from Chapter 11 bankruptcy protection in May 2003. While it has significantly streamlined operations, closing 599 stores and slashing 67,000 jobs, its sales are eroding rapidly.

Kmart also has a separate deal to sell 54 of its stores to Sears, Roebuck and Co. (S: Research, Estimates) for up to $621 million. Sears plans to occupy those stores by April 2005, report said, when approximately 5,000 more Kmart workers will lose their jobs.

Kmart (KMRT: Research, Estimates) shares fell $1.87 to close at $76.86 Thursday on the Nasdaq.  Top of page

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