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Kmart to Shut 15 Stores, Fire 1,300 by May

February 24, 1996|From Times Wire Services

Kmart Corp. said Friday that it will shut 15 stores by the end of May, including five in Southern California, and fire 1,300 employees, marking the beginning of a previously announced plan to close 60 stores.

The beleaguered discount retailer also announced a series of changes in its merchandising division, which analysts see as the main component in its turnaround.

"This is consistent with what [Chairman and Chief Executive] Floyd Hall wants to do," said Kurt Barnard, longtime retailing consultant and president of Barnard Retail Consulting Group.

Hall is trying to boost profitability by closing money-losing stores and revitalizing product offerings, Barnard said.

The five stores to be closed by May 26 in Southern California include one in Mission Viejo in Orange County, one in Rialto in San Bernardino County, one in Perris in Riverside County and one each in Calexico and Vista in San Diego County. In addition, three stores in Texas, two in Michigan, and one each in Maine, New Jersey, Ohio, Oregon and Rhode Island will also be shuttered.

"These 15 stores were identified as not meeting Kmart's necessary return on investment requirements to remain open or renew the leases," said Donald Keeble, executive vice president of store operations. Troy, Mich.-based Kmart said it plans to shutter an additional 45 stores by the end of the year.

Shares of Kmart closed up 12.5 cents at $7.125 on the New York Stock Exchange.

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