When 2019 came to a close, it seemed possible that it might have been the final holiday season for Kmart. The one-time discounting powerhouse had been continuously closing locations over the past several years. The retailer seemed like it was running out of stores to close and had abandoned its presence in most major metropolitan markets. But to the surprise of skeptics, a handful of Kmart locations have remained in operation and have started stocking shelves with holiday-themed merchandise.
Kmart survived the entire month of August without initiating any additional store closures. Approximately only three dozen Kmart stores, located throughout the United States, Puerto Rico, the US Virgin Islands, and Guam are currently in operation. Twenty years ago, there were over 2,100 locations.
The fact that Kmart is even alive, in any bricks-and-mortar format, defies the company’s precarious financial condition. Last September, Neil Saunders of GlobalData Retail told CNN Business that Kmart was a “tired” brand that “has little to offer.” Saunders suggested that the company is “on a journey where the ultimate destination is failure.”
Transformco, the current operator of Kmart and Sears stores, was created in 2019 after Sears Holdings filed for bankruptcy. But Transformco is little more than a renaming of the company’s retail operations. Over the years, Sears Holdings, and its CEO Eddie Lampert, have been selling off the company piece by piece, from Craftsman tools to Kenmore appliances.
In a rare statement, Larry Costello, PR Director for Transformco, outlined the company’s strategy. “Our current focus at Kmart is on end-of-summer deals,” said Costello. “Layaway at Kmart has been a great service and very popular among our members, especially for holiday shopping and back to school.” Kmart and Sears prefer to use the term “members,” rather than “shoppers” or “customers.”
Costello acknowledges that Kmart will soon start stocking its stores with holiday merchandise. “Halloween costumes and related products will be available in stores in mid-September." The Kmart website is already selling Halloween costumes, along with artificial Christmas trees.
A recent visit to the Kmart in Lower Manhattan showed newly-stocked shelves of Halloween merchandise throughout the store’s Seasonal department. A large collection of plastic pumpkins, children’s costumes, and ghostly figurines confirmed that this store has plans beyond the COVID-19 summer of 2020.
Christmas wrapping paper can also be found in its Seasonal department. It seemed like the store is anxious to begin its Christmas promotional period but, upon further inspection, the Seasonal department also includes excess stock of Easter grass, St. Patrick’s Day necklaces, and Valentine’s Day bears from years past.
This location has played an important role in this Lower Manhattan community. The area is populated by residents and college students that depend on its large stock of clothing and more. But its counterpart on 34th Street, adjacent to Penn Station, did not survive the retailer’s rolling tally of store closures from last February.
The Kmart in the town of Willow Street, Pennsylvania has stood guard since 1991. Located three hours southwest of Manhattan, the store is situated in a rural community, just south of Lancaster. It’s one of 2 Kmarts still remaining in the Keystone state. Just ten years ago there were around 100.
One Willow Street employee reported that COVID-19 has hampered shipments to the store. But the employee stated that Halloween merchandise is on its way and should be on the shelves in just a few weeks. When asked about Christmas goods, the employee stated, “We just want to get through Halloween first.”
Kmart is often known for neglected store buildings with sparsely stocked shelves and long checkout lines hampered by antiquated technology. However, this surviving Kmart location has a different feel than other Kmarts. There is a sense of pride at Willow Street. It’s clean, respectfully stocked, and staffed with employees who are helpful and willing to sell. That’s not often the case.
The Willow Street store still has the “Big Kmart” moniker on its storefront. The “Big Kmart" format was introduced in 1997 and was designed to provide shoppers with expanded grocery departments, wide aisles, brighter lights, and larger merchandise assortments. “Big Kmart” was a reaction to Walmart’s WMT -2.9% newly found dominance. In 1991, Walmart surpassed Kmart as the country’s largest mass merchandiser. Unfortunately, as Kmart tried to play catch up to Walmart, it only made marketing blunders and fell farther behind. In the end, “Big Kmart” was little more than a fresh paint job and some rearranged shelves. It was too little, too late.
The arrival of plastic pumpkins at the three dozen remaining Kmarts does not mean that the retailer’s future is safe. A number of Sears and Kmart stores have recently appeared on commercial real estate leasing sites. These stores may still be open but their leases are up for sale. Some locations offer immediate availabilities.
Transformco started off 2020 with a store closing strategy that included a final liquidation sale at 96 Kmart and Sears locations. Many predicted that Kmart and Sears could not continue much longer in any form. However, no one predicted the scenarios that exist this September: a small collection of Kmart stores standing ready for the 2020 holiday shopping season and a global pandemic throwing the world into chaos with over 26.4 million diagnosed cases of a deadly virus.