Wal-Mart Competitor Files Chapter 11
by February 4, 2002 12:00 am 157 views
Kmart Corp., the chief rival of Wal-Mart Stores Inc., sought protection from creditors in mid-January after years of falling sales and failed turnarounds.
Based in Troy, Mich., Kmart filed a Chapter 11 reorganization plan in U.S. Bankruptcy Court for the Northern District of Illinois, in Chicago.
The company, in a news release, said all 2,114 of its stores would remain open for business and claimed that all employee, customer and vendor obligations would continue to be met, thanks to a $2 billion debtor-in-possession financing package it has obtained. Kmart hopes to emerge from bankruptcy next year, CEO Charles Conaway said.
“We are determined to complete our reorganization as quickly and smoothly as possible, while taking full advantage of this chance to make a fresh start and reposition Kmart for the future,” Conaway said.
While moving to assure employees, the company said it would be “evaluating the performance of every store and terms of every lease in the Kmart portfolio by the end of the first quarter of 2002 with the object of closing unprofitable or underperforming stores this year.”
The company listed assets of $17 billion at book value and liabilities of $11.3 billion as of Oct. 31, 2001.
A local company representative said Kmart had 10 stores operating in Arkansas.
Kmart opened its first discount store in 1962, the same year as competitors Wal-Mart and Target opened, but it far outstripped the other chains in store growth and sales through the 1960s and 1970s. The company became the nation’s largest retailer briefly in the 1980s, before being surpassed by Wal-Mart.
• Wal-Mart slipped 14 slots to No. 94 in Fortune magazine’s list of the “100 Best Companies to Work For,” which was released Jan. 22. Last year, the world’s largest retailer ranked No. 80.
With 1.3 million employees worldwide, Wal-Mart ranked one slot behind Eli Lilly and one ahead of Texas Instruments. Edward Jones & Co. was No. 1 on the list.
After last year’s ranking came out, John Delery, an associate professor of management in the University of Arkansas’ Sam M. Walton College of Business, said it’s somewhat phenomenal that Wal-Mart made the top 100 at all because of its size.
Little Rock-based Acxiom came in at No. 72 this year after appearing at No. 64 in 2001, No. 19 in 1999 and No. 38 in 1998.