Does Kmart deserve to die?

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Why is Wal-Mart (whose labor and local and international social policies I despise) and Target successful while Kmart failed? Anyone who has ever tried to shop in a Kmart store knows the answer. Kmart management and employees gave the worst customer service in retailing history. Kmart had the products and the right prices, but management failed in it's employee training and supervision. People hated trying to get service in Kmart stores. There's a management lesson to be learned from the Kmart experience.
---BumbleBeeBoogie
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Kmart Announces 660 More Job Cuts, More Than Half at Company Headquarters in Troy, Mich.
By Sheila Lalwani Associated Press Writer
Published: Mar 31, 2003

DETROIT (AP) - Kmart Corp. announced the elimination of 660 jobs as part of the bankrupt retailer's efforts to cut costs. Some 400 jobs will be cut at headquarters in suburban Troy, 123 corporate positions will be cut around the country, and an additional 137 positions currently open will be eliminated. The announcement of the job cuts comes about a month before Kmart plans to exit Chapter 11 protection. The company said in January it would cut jobs at headquarters, but did not at the time disclose the extent of the cuts.

Kmart filed for bankruptcy on Jan. 22, 2002. Last year, it closed 283 of its 2,114 stores across the nation, affecting more than 22,000 workers. Earlier this year, Kmart shuttered an additional 316 stores, affecting more than 34,000 employees.

"We continue to take the necessary actions to create a financially healthy, cost-effective organization that is positioned to compete in the discount sector," Julian Day, Kmart's president and chief executive, said in a statement. Day said the cuts will save the company $150 million a year.

It is trying to focus on a longer-term goal of differentiating itself from competitors like Wal-Mart and Target by tailoring its stores to the neighborhoods where they are located. Kmart had suffered as Wal-Mart offered lower prices and Target established a more stylish image.

A week ago, Kmart reported that it lost $3.22 billion for fiscal 2002. For its fiscal fourth quarter ended Jan. 29, it had a net loss that narrowed to $1.10 billion, or $2.13 per share, compared with a loss of $1.65 billion, or $3.31 per share, a year ago.
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On the Net:
http://www.kmart.com

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If K-Mart were selling SAS shoes, they would tie the laces together and make a dump display at the end of the aisle.

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We have the same situation in two of our large local super markets. One gives wonderful service, the people go out of their way to be pleasant. This attitude is directly correllated with management policy. The store is booming.

In the other store the service is lousy, the personnel surly. I don't go there anymore, but I understand that it is not doing well, and that they have curtailed a lot of their services and specialties. Too bad.

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No business deserves to die. Only bad managers deserve to die from the business world, because they cause all of their employees and investors to lose. c.i.

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WalMart could go the way of KMart, IMHO. Giant chains like that destroy homegrown businesses. It's happened in so many places. Downtowns die, people drive for miles to shop at the big box store. It's a disaster all the way around...

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D'art, What you say is true, but price competition will win out 85 percent of the time. c.i.

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I know, c.i., but it still doesn't make me happy to see this happening...

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Couple of reasons, Wal-mart has superior inventory control, they're usually never out of a product. The system they use is more effective. They also have employees who are managers of certain departments, who make sure it's well-stocked, and keep the displays up.

I took a class that went over this. Me being a college gad'utate makes me wicked smaht on this stuff.

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Indeed, Slappy. I'm impressed!

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Slappy impressed me way back when...... Wink

c.i.

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No Kmart does not deserve to die, but it has to decide what it is. My local Kmart is trying to be a retail store, discount retailer, and a supper market all in the same building. That means within the same shopping center it is competing both with a national grocery chain and the WalMart across the street, a sure recipe for failure.

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Kmart Names New Board of Directors
Kmart Names New Board of Directors
The Associated Press
Published: Apr 2, 2003

TROY, Mich. (AP) - Kmart Corp. investors, creditors and lenders have elected an entirely new board of directors to lead the discount retailer when it exits bankruptcy protection. Kmart's president and chief executive, Julian Day, will serve on the board, along with Edward S. Lampert, chairman and chief executive of ESL Investments, a major Kmart investor. None of the nine current board members will remain on the board, the Detroit Free Press and The Oakland Press of Pontiac reported Wednesday.

Kmart plans to exit Chapter 11 protection by April 30.

The nominees have been submitted to the U.S. Bankruptcy Court in Chicago. A hearing at the court is scheduled for April 14-15 to approve the company's exit from bankruptcy.

In addition to Lampert, the major investors also nominated William Crowley, president and chief operating officer of ESL Investments; Steven Mnuchin, a retired Goldman Sachs executive and Thomas Tisch, a managing partner with a private investment firm in New York. The lenders nominated Ann Reese, a former chief financial officer at ITT Corp., and Brandon Stranzl, a senior research analyst with Third Avenue Management. The creditors nominated E. David Coolidge III, chief executive of a private investment firm in Chicago, and William Foss, a self-employed attorney in San Francisco.

Kmart filed for bankruptcy on Jan. 22, 2002, following lackluster holiday sales and drop in its stock price. Existing shareholders have lost about $6.7 billion in equity over the last two years. Kmart's common stock was delisted from the New York Stock Exchange in December. As part of its proposed reorganization plan, Kmart intends to cancel its current stock and reissue new shares to creditors as payment for their bankruptcy claims.

It has closed 283 stores and plans to shutter 326 more by mid-April, leaving the retailer with just over 1,500 stores and a combined loss of more than 59,000 employees, once the second round of closings is complete.

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Couple of reasons, Wal-mart has superior inventory control, they're usually never out of a product. The system they use is more effective. They also have employees who are managers of certain departments, who make sure it's well-stocked, and keep the displays up.

Yeah, if you call inviting Big Brother into your home via RFID chips Superior, Walmart is doing a SUPER job!

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Wal-mart expects you to do your own check-out. Would you rather deal with a machine than a person? If you want a person to check you out, you have long lines. No thanks! Albertson's supermarkets are doing the same thing, and I avoid them when possible too.

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coluber2001- Interesting- The Wal-Mart in my neighborhood (not a superstore) has human cashiers. The K-Mart in the next town (which had recently closed) used one cashier, and the rest self checkout. Most people did not like the self checkout, so the human staffed line was always long.

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Slappy is right on about this. K-Mart existed in Canada rather briefly (well, in Tarana anyway). When you shopped there, the crappy service, sad, understocked displays and general depressive mood just made one feel "I'm poor, and this is my only option, aside from robbing a Goodwill box." The edge with Wal-Mart's and Target's advertising campaigns is that they don't make you feel like a derelict for shopping there. They caught on to the fact that in a diminishing economy, the last thing people want is to be made to feel inferior to those who have more money to shop in high-end stores. It's all about the facade of humanism, man.

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While K-mart may not "deserve" to die, self-checkout does.

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Quote:

When you shopped there, the crappy service, sad, understocked displays and general depressive mood just made one feel "I'm poor, and this is my only option, aside from robbing a Goodwill box."

Cav-Funny- I used to shop in K Mart for certain items. I had never conceptualized it, but the air in the store WAS depressing.

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Yeah, you don't get that feeling at other discount stores. That's just good management.

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Cav
As much as I hate Wal-Mart for social policy reasons, the rare times I've been in a Wal-Mart (desperate and no where else to go late at night) the employees have provided helpful service.

K-Mart did the worst job of training its employees in good customer service that I've ever seen in a big chain, except maybe for the customers of loan sharks.

BBB

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Does Kmart deserve to die?

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