CULLMAN – Kmart in Cullman will be closing its doors for good in December. The closure is one of 64 happening nationwide. Liquidation sales are reported to begin this week.
According to a report from Business Insider, Sears Holdings, which owns Sears and Kmart, informed Kmart employees of the closures last Friday.
Local Kmart management did not respond to inquiries. "We are not allowed to give any information to the media," said a member of the Cullman Kmart management team, who did not give her name.
Sears Holdings' Director, Corporate Communications Howard Riefs, in a statement to The Cullman Tribune, said, "We can confirm that we are making the difficult, but necessary decision to close the Kmart store at 1731 Second Ave. SW, Cullman. The store will close to the public in mid-December. It’s important for you to know that until then, the store will remain open for customers. The store will begin its liquidation sale on Sept. 22."
Riefs continued, "We have been strategically and aggressively evaluating our store space and productivity, and have accelerated the closing of unprofitable stores as previously announced. We often hear from our members who are disappointed when we close a store, but our Shop Your Way membership platform, websites and mobile apps allow us to maintain these valued relationships long after a store closes its doors. As a result, we hope to retain a portion of the sales previously associated with this store by maintaining our relationships with the members who shopped this location. Our members and customers can also shop at our other Kmart locations, which are listed at http://www.kmart.com/stores.html."
Riefs says the number of associates affected is not publicly available, but that those associates who are eligible will receive severance and have the opportunity to apply for open positions at area Sears or Kmart stores. "Most of the associates are part time/hourly," he said.
Also reported by Business Insider, "Separately on Friday, Seritage Growth Properties, a real-estate investment trust that owns 235 Sears and Kmart stores, revealed in a filing that Sears had decided to terminate leases on 17 stores, meaning it would close those stores. According to RBC Capital Markets analysts, all 17 closures are Kmart stores and they will close by January."
In April, Sears Holdings announced the closure of 68 Kmart stores.
"The decision to close stores is a difficult but necessary step as we take aggressive actions to strengthen our company, fund our transformation and restore Sears Holdings to profitability," said Edward S. Lampert, chairman and chief executive officer of Sears Holdings, said at the time. "We're focusing on our best members, our best categories and our best stores as we work to accelerate our transformation."
"Moody's analysts warned last week that Kmart doesn't have enough cash or access to cash to stay in business," said the Business Insider report.
According to a press release issued by Moody's on Sept. 13, Moody's Investors Service downgraded Sears Holdings Corp.'s Speculative Grade Liquidity rating to SGL-3 from SGL-2.
"The SGL-3 rating reflects our view that Sears will continue to rely on external financing and the monetization of its alternative assets to fund its operating losses" stated Moody's Vice President, Christina Boni. "We recognize the risks associated with relying on these sources and continued shareholder support to finance its negative operating cash flow which is estimated by Moody's to be approximately $1.5 billion this year."
The Cullman Kmart is located at 1731 Second Ave. SW in the King Edward Plaza Shopping Center.
