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Last updated on Friday, September 26, 2014
(BEDFORD) - Bedford’s Kmart will close its doors for the last time in December, leaving 62 employees without a job.
The store is being closed to help reduce corporate expenses, according to a press release.
Eligible associates will receive severance and have opportunities to apply at other area Sears or Kmart stores. Most employees are part-time or hourly.
Kmart, located at 1320 James Ave., will remain open until December, but has begun liquidating its inventory.
Two Indianapolis stores are also closing in December, 2715 Madison Ave. and 7425 E. Washington St. The Madison Street store employes 131 and the Washington Street store, 139.
The Decatur store, located at 804 S. 13th Street, has 49 employees and the Fort Wayne store, located at 820 Coliseum Boulevard North, has 69 employees and they too will close in December.
The closing "are part of a series of actions we're taking to reduce ongoing expenses, adjust our asset base, and accelerate the transformation of our business," as it moves to do more sales online, said Howard Riefs, a spokesman for Sears Holding, which owns Kmart.
Kmart was founded in 1899 by Sebastian Spering Kresge in Detroit and became one of America's largest retailers before filing for bankruptcy in 2002. After emerging from bankruptcy, Kmart was acquired by a hedge fund and later became a subsidiary of Illinois-based Sears.
But Sears is struggling as well. The national retailer lost $573 million in the first half of the year, almost three times its loss in the first half of 2013.
"We have continued to show progress in our transformation, as demonstrated by our year-over-year increase in online and multi-channel sales, and with our member sales now representing 73% of eligible sales," says Edward S. Lampert, Sears Holdings' Chairman and Chief Executive Officer said at a stockholders meeting in August. "However, our second quarter earnings are unacceptable and we are taking steps to address our performance on several levels. This includes reducing costs as we evolve our business model, investing in our Shop Your Way and Integrated Retail customer initiatives, rationalizing our physical footprint and improving pricing and promotions. As we move through the transformation, our new programs are becoming more prominent both in how we run the company and in how we serve our members, and we are pleased with how our members are responding."
"As we progress with our transformation by investing in new programs and platforms, we continue to bear the costs of two promotional models, which adversely impacts margins. There is more work to be done to get results where we expect them to be. Like any transformation, we must first overcome the burden of the initial costs before we can enjoy the benefits. We have a large and valuable portfolio of assets that provide us with the flexibility we need to fund our transformation as we proactively work to return Sears Holdings to profitable growth and deliver shareholder value."
According to the financial results for the second quarter of 2014, Kmart comparable stores sales were down 1.7% for the quarter as compared to a 2.1% decline last year, also despite the continuing impact of consumer electronics industry trends, as well as the impact of our grocery & household goods business. Excluding the impact of both, comparable store sales would have declined 1.0%;
Sales to Shop Your Way members in Sears Full-line and Kmart stores increased to 73% of eligible sales, up from 71% during the second quarter last year;
Online and multi-channel sales grew 18% over the prior year second quarter and 22% over the prior year first half.
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