As predicted yesterday [WAMN: 22-Jan-02] US retail giant Kmart filed Tuesday for Chapter 11 bankruptcy protection, conferring on the supermarket chain the dubious distinction of being the largest retail crash in the nation’s history.
Industry observers say it will result in the closure of up to 700 of Kmart outlets, a third of the total, and tens of thousands of job losses from a total headcount of 250,000. The decision to seek bankruptcy protection was the result of dwindling cash reserves, caused by disappointing sales and profits at Christmas and the knock-on effect of declining supplier confidence.
Said Kmart chief executive Charles Conway: “We deeply regret any adverse effect today’s action will have on our associates, vendors and business partners. I also regret the impact of our filing on all Kmart shareholders, including many of our associates.”
Shares in Kmart fell 56% per cent Tuesday to 76 cents, compared with a high of $20 during the summer of 1998.
News source: The Times (London)