THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Friday, September 9, 1994 TAG: 9409090553
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: ASSOCIATED PRESS
DATELINE: DETROIT LENGTH: Medium: 79 lines
Kmart Corp. announced Thursday it will close 110 stores in 31 states and eliminate 6,000 jobs in a restructuring that reflects the intense competition in the retail business.
Investors pushed Kmart stock higher, welcoming the move to close stores that aren't making enough money so the company can concentrate on expanding in more promising areas.
It's a steep retrenchment for Kmart, whose blue-light specials dominated suburban mini-malls, but have been eclipsed by Wal-Mart's aggressive moves into rural areas.
``We will insist that our stores fully meet our return on investment requirements,'' Kmart chairman Joseph E. Antonini said.
``Much remains to be done. But we are making considerable progress with initiatives to strengthen the core Kmart discount business and enhance the profitability of Kmart Corp.''
No stores are scheduled to be closed in Hampton Roads. In Virginia, only one store - in Petersburg - is on the closure list. In North Carolina, the company will close a total of five stores in Wilmington, Greensboro, Eden, Henderson and Charlotte.
Kmart also replaced the head of its expanding Super Kmart division with a grocery executive. Super Kmart Centers put traditional Kmart offerings and a supermarket under one roof. There are 44 Super Kmarts and the company plans to open another 26 by the end of the year.
The company had said earlier it planned to close stores, and some analysts saw Thursday's announcement as a symbolic one aimed at signaling to Wall Street that it is serious about making changes.
Kmart's stock finished 50 cents per share higher on the New York Stock Exchange Thursday at $18.
The job cuts include 10 percent of the company's managers. Those cuts - a total of 2,300 jobs - will be made over two years, including 650 store managers who will lose their jobs immediately as a result of the store closings. Kmart employs about 260,000 people worldwide.
In 1990, Kmart began a six-year, $3 billion plan to relocate some stores, modernize others and close 150 outlets.
Old, cramped stores were to be traded for larger, gleaming successors with wider aisles and higher-quality, more upscale merchandise.
That process is expected to be about 65 percent complete by the end of 1994, Antonini said Thursday.
About 60 stores had been closed before 1994. ILLUSTRATION: TOP 10 RETAILERS
The biggest U.S. retailers, based on January-August 1994 overall
sales results:
1. Wal-Mart Stores Inc.
$44.47 billion
2. Kmart Corp.
$19.4 billion
3. Sears, Roebuck and Co.
$18.11 billion
4. Dayton Hudson Corp.
$10.71 billion
5. J.C. Penney Co. Inc.
$9.37 billion
6. Melville Corp.
$6.58 billion
7. May Department Stores Co.
$6.03 billion
8. Federated Department Stores Inc.
$3.85 billion
9. Limited Inc.
$3.61 billion
10. Dillard Department Stores
$2.89 billion
by CNB