|Quoting N801NW (Reply 15):|
It appears that the K-Mart stores are being run as cheaply as possible until their real estate value can be monetized. I don't think Eddie Lampert ever really wanted to be a merchant.
This is key. K-Mart's remaining strength is in its real estate. As the pioneer of discount retail stores, K-Marts owns (or has long-term leases on) prime real estate in many crowded markets. Not much doubt K-Mart was intending on divesting these locations for re-development (sell them to other big box retailers, or have them redeveloped into mixed-used projects) but the collapse of the real estate market delayed their plans. K-Mart's other strength was its urban locations, as Wal-Mart and Target generally avoided impoverished urban markets, but that trend's changed in recent years. In the mean time, K-Mart's changed its business plan from low-costs to heavily promotional. Yet it hasn't expanded, nor has it remodeled its stores, since its bankruptcy.
Sadly, K-Mart might have still been on top had it not been mismanaged in the '80s and '90s. Capital was rarely put into its stores, it failed to invest in technology or modernize its distribution network (while investing heavily in failed ventures) ultimately leading to its collapse.
My first ever job was at a K-Mart that stood alongside a Farmer Jack (a large grocery chain in a similar situation as K-Mart that eventually went out of business). On a typical Saturday, both stores were incredibly busy and overtime was fairly common. Eventually Meijer and Kroger moved into the area and the crowds disappeared. While K-Mart is still in business, and the Farmer Jack was acquired by another grocery store chain, when I return to the area, neither store is ever very busy. On a recent trip to K-Mart (my first in many years), I noticed that most of the staff is still there many years later even though the store employs only one-fourth the staff it once did. I firmly believe the only reason both stores are still open is that they're holding out for Wal-Mart (there's no Wal-Mart or Target within 20-minutes, and neither store would be in the commuting pattern of most residents, and the spot would be ideal for such a store). Of course, the residents (it's an affluent area) would protest such a store (as they did Meijer and its attempts at building in four locations) even though it'd probably be a good thing for high school jobs.
[Edited 2010-10-09 12:03:26]
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