Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: FRIDAY, June 2, 1995                   TAG: 9506020098
SECTION: BUSINESS                    PAGE: B-6   EDITION: METRO 
SOURCE: Associated Press
DATELINE: DETROIT                                 LENGTH: Medium

GET-TOUGH KMART TO CLOSE 72 STORES, CUT 5,800 WORKERS

The troubled Kmart Corp. will shut down 72 of its least-profitable discount stores nationwide, cutbacks that will cost 5,800 jobs, the company said Thursday.

The retail chain's sales and profits have lagged in recent years partly because its aging stores have been unable to compete with its rivals' newer branches. Kmart also has had major inventory problems.

Under pressure from stockholders, the board ousted Chief Executive Officer and President Joseph Antonini in March. It has yet to name a successor.

The cutbacks announced Thursday - which do not include any of the chain's Virginia stores - follow the closing of 110 stores late last year and early this year as part of a major corporate overhaul. Kmart also relocated, consolidated or closed 120 stores earlier in 1994.

Those changes, along with cuts at the company's suburban Detroit headquarters, eliminated about 7,100 jobs.

The announcement did not surprise Wall Street. Kmart's stock closed up 12 1/2 cents at $12.87 1/2 a share in early trading on the New York Stock Exchange.

The cost of the latest closures was provided for in a $1.35 billion store restructuring charge recorded in the fourth quarter of 1993.

Donald Keeble, vice president of store operations, said the stores have not met performance standards set as part of the restructuring. The stores are in 23 states, with the most in California and Texas.

``As we continue to strengthen Kmart's core business, we will insist that our stores fully meet these investment standards,'' he said.

Spokeswoman Mary Lorencz said no more mass closure announcements are expected this year. But analyst L. Wayne Hood of Prudential Securities in Atlanta said many more stores could close if their sales do not respond to recent upgrades in inventory and management systems.

``They have maybe another 200 stores that I would put on the marginal list,'' Hood said.

Kmart reported a $28 million loss in this year's first quarter, its ninth consecutive quarter of lackluster earnings amid tough competition from Wal-Mart Stores Inc., the Target chain of Dayton-Hudson Corp., and others.

Kmart also said it plans to remodel 85 stores and build 43 discount stores and 22 Super Kmart Centers in 1995.