Kmart
Kmart, formerly Kmart Corporation, is a department-store chain and online retailer in the United States and its territories.
Originally incorporated in 1899 as S. S. Kresge Corporation, Kmart became one of the largest retailers in the world, operating 2,486 stores globally at its peak in 1994. Its big-box stores sold a large variety of goods, including clothing, appliances, electronics, housewares, and food.
The company began a slow decline in the 1990s, leading to its first Chapter 11 bankruptcy filing in 2002. In 2005, Kmart and Sears merged to form Sears Holdings Corporation. Store closures continued gradually until Sears Holdings Corporation filed for bankruptcy in 2018. The following year, Kmart became a subsidiary of Transform SR Brands LLC, a privately held company that was formed in 2019 to acquire assets from Sears Holdings. More Kmart closures followed. The company closed its last full-sized big-box store in the mainland United States in 2024.
Today, there are three remaining Kmart locations — a big-box department store in the US Virgin Islands, a big-box store in Tamuning, Guam, and a smaller location in Kendale Lakes, Florida.
History
Early years
, the founder of the company that would become Kmart, met variety-store pioneer Frank Winfield Woolworth while working as a traveling salesman and selling to all 19 of Woolworth's stores at the time. In 1897, Kresge invested $6,700 saved from his job into a five-and-dime store in Memphis, Tennessee. He jointly owned the first store with his former tinware customer, John G. McCrory. Kresge and McCrory added a second store in downtown Detroit the following year. These were the first S.S. Kresge stores. After two years of partnership, he traded McCrory his share in the Memphis store, plus $3,000, for full ownership of the Detroit store, and formed the Kresge & Wilson Company with his brother-in-law, Charles J. Wilson.In 1912, Kresge incorporated the S.S. Kresge Company in Delaware with 85 stores. In 1916, Kresge incorporated a new S.S. Kresge Company in Michigan and took over the operations of the original company, becoming the modern day Kmart company. The company was first listed on the New York Stock Exchange on May 23, 1918. During World War I, Kresge experimented with raising the limit on prices in his stores to $1. By 1924, Kresge was worth approximately $375 million and owned real estate of the approximate value of $100 million. Growth early in the 20th century remained brisk, with 257 stores in 1924, rising to 597 stores by 1929. Kresge retired as president in 1925, continuing as the company's chairman. The Great Depression reduced profitability and resulted in store closings, but the number rose to 682 in 1940. After the war, shopping patterns changed and many customers moved out of the cities into the suburbs.
1960s–1970s
Under the leadership of executive Harry Cunningham, S.S. Kresge Company opened the first Kmart-named store, at on January 25, 1962, in San Fernando, California. It was referred to by Kresge as a "bantam" Kmart and was in fact originally intended to be a Kresge store until late in the planning process, This happened just six months before the first Walmart opened, while the first ground-up full-size Kmart with, opened on March 1, 1962, in Garden City, Michigan. Cunningham and Sam Walton were both inspired by Ann & Hope, which they each visited in 1961. Seventeen more Kmart stores opened in 1962. Kmart Foods, a now-defunct chain of Kmart supermarkets, opened in that decade. Though the chain continued to open Kmart branded stores, the company was still officially known as S.S. Kresge Company.Company founder Kresge died on October 18, 1966, at age 99.
Around the time of the opening of the first Kmart, some poorly performing S.S. Kresge stores were converted to a new "Jupiter Discount Stores" brand, which was conceived as a bare-bones, deep discount outfit. During the 1970s, Kmart put a number of competing retailers out of business. Kresge, Jupiter and Kmart stores mainly competed with other store chains like Zayre, Ames, Bradlees, Caldor, Hills, and those that were operated by MMG-McCrory Stores. In 1977, S.S. Kresge Company changed its name to K Mart Corporation.
1980s: Last Kresge stores
In 1980, Vice Chairman Bernard M. Fauber was elected as the chairman and as the CEO of Kmart.In April 1981, the 2,000th Kmart store opened in Kearny, New Jersey which eventually closed in May 2021. By the end of 1981, there were 2,055 Kmart stores across the United States and Canada.
In 1987, the Kmart Corporation sold its remaining 76 Kresge and Jupiter stores in the United States to McCrory Stores, and the brands were almost entirely discontinued, although Canadian Kresge and Jupiter stores continued to operate until 1994.
Kmart experimented with co-branding in 1985, when the in-store cafeteria at the store in Canton, Michigan, was converted to a Wendy's. During this period in the 1980s, Kmart's in-store cafeterias and delis also gained popularity for their sub sandwiches, which developed a cult following for their distinctive ingredients and affordability.
As well as that, Kmart also co-branded with Bruno’s Supermarket to create a brand new Hypermarket called American Fare.
Until November 1990, when it was passed by Walmart, Kmart was the second-largest retailer in the United States, after Sears. In the late 1980s and into the 1990s, the corporate office shifted much of its focus from the Kmart stores to other companies it had acquired or created, such as Sports Authority, Builders Square, and Waldenbooks.
Blue Light Special
The Blue Light Special was a sale promotion within the store for a short period within store hours only. It was advertised using a rotating blue light, in the same style a police car used, and was announced over the store public address system with the phrase "attention, Kmart shoppers", a phrase which became a pop culture reference. The original concept for the Blue Light Special was a limited-time offer to sell slower-moving merchandise. The sale was first introduced in 1965 and was retired in 1991.In the 2000s, Kmart periodically brought back the Blue Light Special. It was started in 2001, discontinued in 2002, briefly revived in 2005, revived again on Saturdays in 2009 and for a final time in November 2015.
1990–2001: New image
In 1990, in an effort to update its image, Kmart introduced a new logo. It dropped the old-style italic "K" with a turquoise "mart" in favor of a red block letter K with the word "mart" written in script and contained inside the "K". Kmart then began remodeling stores shortly thereafter. This logo was replaced in 2004 with the current one. In 1990, Little Caesars Pizza opened its first in-store Kmart restaurant in Rochester, Michigan. In 1995, Kmart also tried to reinvent itself by using the short-lived name Today's Kmart.Super Kmart Center opened an all-new location on July 25, 1991, in Medina Township, Ohio, featuring a full-service grocery with a full-service deli, seafood counter and bakery. It also had general merchandise like many Kmarts had. However, this location was downsized in 2011 and was one of a number of Kmarts closed in early 2012 following poor Christmas 2011 sales. The second ground-up Super Kmart Center opened in Copley Township, Ohio, featuring an in-store video rental center, and an in-store carryout Chinese restaurant. This location has also shut down. The last Super Kmart Center in Howland Township, Ohio, closed on April 8, 2018. Besides the Medina and Copley locations, many more Super Kmarts opened nationwide.
The company would again revise its name in 1991 after 14 years, changing slightly to Kmart Corporation.
In 1992, Kmart entered the Eastern European market with the purchase of 13 stores in the former Czechoslovakia. These stores were sold off in 1996.
The company also began to offer exclusive merchandise by Martha Stewart, Kathy Ireland, Jaclyn Smith, Lauren Hutton, and Thalía. Other recognizable brands included exclusively licensed merchandising of products relating to Sesame Street and Disney. Actress and television personality Rosie O'Donnell and actress/director and producer Penny Marshall became among the company's most recognized spokespersons.
In September 1995, Kmart sold its money-losing in-store auto repair centers to Penske Corporation for $112 million to operate them as Penske Auto Centers. Penske later closed the auto repair centers in 2002 as a result of a payment dispute with Kmart.
Big Kmart opened in Chicago, Illinois, on April 23, 1997. The format focuses on home fashions, children's apparel, and consumables. Most Kmart stores were remodeled to this format during the late 1990s and the early 2000s. Initially, this approach was successful and sales numbers had grown by 10 to 15% in the Kmart stores converted to the Big Kmart format. During 1997 and 1998, the company either converted regular Kmart stores into or opened outright 1,245 Big Kmart locations. By 1998, 62% of Kmart's stores were Big Kmart locations. In 1998, Kmart acquired 45 former Venture stores and converted them into Big Kmart locations. There was a high of 1,900 Big Kmart stores during the year 2000, compared to about 100 for Super Kmart and another 100 remaining traditional Kmart locations.
The Sports Authority was acquired by Kmart in 1990 and spun off five years later.
Kmart's profitability and sales peaked in 1992, and the later decline is attributed to competition with Walmart, Target, and internet shopping. In 1994, Kmart announced they would close 110 stores. Unlike its competitors Walmart and Target, Kmart failed to invest in computer technology to manage its supply chain. Furthermore, Kmart maintained a high dividend, which reduced the amount of money that was available for improving its stores. Many business analysts also faulted the company for failing to create a coherent brand image.
In 1997, Kmart launched the Kmart Cash Card as a replacement for the paper gift certificates and to facilitate the return process.
In July 1999, Kmart hired SuperValu and Fleming to distribute $3.9 billion worth of food and other related products to all Kmart stores.
In 2000, Kmart and Capital One launched an all-new co-branded MasterCard as a replacement for the private label Kmart credit cards.
Also in 2000, Kmart expanded the Martha Stewart Everyday Garden Collection to include live plants and seeds. Kmart also launched the Martha Stewart Everyday Kitchen, which is a complete line of housewares essentials.
In July 2000, Kmart closed 72 underperforming stores, while opening 20 new Big Kmart stores, converting 12 regular Kmart stores into Super Kmart Center stores, and opening 5 new Super Kmart Center stores. The company announced a planned major restructuring, in which Kmart would invest in new customer check-out and new inventory management technology and other related systems.