Kmart

Kmart ( ), formerly Kmart Corporation, is a department store chain and online retailer in the United States and its territories.

Originally incorporated in 1899 as S. S. Kresge Corporation, Kmart became one of the largest retailers in the world, operating 2,486 stores globally at its peak in 1994. Its big-box stores sold a large variety of goods, including clothing, appliances, electronics, housewares, and food.

The company began a slow decline in the late-1990s, leading to its first Chapter 11 bankruptcy filing in 2002. In 2005, Kmart and Sears merged to form Sears Holdings Corporation. Store closures continued gradually until Sears Holdings Corporation filed for bankruptcy in 2018. The following year, Kmart became a subsidiary of Transform SR Brands LLC, a privately held company that was formed in 2019 to acquire assets from Sears Holdings, which included 202 remaining Kmart stores. Additional Kmart closures rapidly followed, bringing the number of stores remaining to under a dozen by early 2022. The company closed its last full-sized big-box store in the mainland United States in 2024.

As of 2026, there are three remaining Kmart locations: a big-box department store in Charlotte Amalie, the US Virgin Islands, a big-box store in Tamuning, Guam, and a smaller location in Kendale Lakes, Florida.

History

Early years

S. S. Kresge, the founder of the company that would become Kmart, met variety-store pioneer Frank Winfield Woolworth while working as a traveling salesman and selling to all 19 of Woolworth's stores at the time. In 1897, Kresge invested $6,700 saved from his job into a five-and-dime store in Memphis, Tennessee. He jointly owned the first store with his former tinware customer, John G. McCrory. Kresge and McCrory added a second store in downtown Detroit the following year. These were the first S.S. Kresge stores. After two years of partnership, he traded McCrory his share in the Memphis store, plus $3,000, for full ownership of the Detroit store, and formed the Kresge & Wilson Company with his brother-in-law, Charles J. Wilson.

In 1912, Kresge incorporated the S.S. Kresge Company in Delaware with 85 stores. In 1916, Kresge incorporated a new S.S. Kresge Company in Michigan and took over the operations of the original company, becoming the modern-day Kmart company. The company was first listed on the New York Stock Exchange on May 23, 1918. During World War I, Kresge experimented with raising the limit on prices in his stores to $1. By 1924, Kresge was worth approximately $375 million and owned real estate of the approximate value of $100 million.Farid-Es-Sultaneh v. Commissioner, 160 F.2d 812 (2d Cir. 1947). Growth early in the 20th century remained brisk, with 257 stores in 1924, rising to 597 stores by 1929. Kresge retired as president in 1925, continuing as the company's chairman. The Great Depression reduced profitability and resulted in store closings, but the number rose to 682 in 1940. After the war, shopping patterns changed and many customers moved out of the cities into the suburbs.

1960s–1970s

Under the leadership of executive Harry Cunningham, the S.S. Kresge Company opened the first Kmart-branded store, a 27,000-square-foot (2,500-square-meter) location, on January 25, 1962, in San Fernando, California. Referred to by Kresge as a "bantam" Kmart, it was originally intended to be a traditional Kresge store until late in the planning process. This opening occurred just six months before the first Walmart opened. Meanwhile, the first full-sized Kmart, at , opened on March 1, 1962, at 29600 Ford Road in Garden City, Michigan. Both Cunningham and Sam Walton were inspired by Ann & Hope, which they each visited in 1961. p. 84. Seventeen more Kmart stores opened in 1962. Kmart Foods, a now-defunct chain of Kmart supermarkets, also opened in that decade. Although the chain continued to open Kmart-branded stores, the company was still officially known as S.S. Kresge Company.

Company founder Kresge died on October 18, 1966, at age 99.

Around the time of the opening of the first Kmart, some poorly performing S.S. Kresge stores were converted to a new "Jupiter Discount Stores" brand, which was conceived as a bare-bones, deep discount outfit. During the 1970s, Kmart put a number of competing retailers out of business. Kresge, Jupiter and Kmart stores mainly competed with other store chains like Zayre, Ames, Bradlees, Caldor, Hills, and those that were operated by MMG-McCrory Stores (McCrory, McLellan, H.L. Green, J.J. Newberry, S.H. Kress, TG&Y, Silver's and eventually G.C. Murphy Co.). In 1977, S.S. Kresge Company changed its name to K Mart Corporation.

1980s: Last Kresge stores In 1980, Vice Chairman Bernard M. Fauber was elected chairman and CEO of Kmart.

In April 1981, the 2,000th Kmart store opened in Kearny, New Jersey which eventually closed in May 2021. By the end of 1981, there were 2,055 Kmart stores across the United States and Canada.

In 1987, the Kmart Corporation sold its remaining 76 Kresge and Jupiter stores in the United States to McCrory Stores, and the brands were almost entirely discontinued, although Canadian Kresge and Jupiter stores continued to operate until 1994.

Kmart experimented with co-branding in 1985, when the in-store cafeteria at the store in Canton, Michigan, was converted to a Wendy's. During the 1980s, Kmart's in-store cafeterias and delis also gained popularity for their sub sandwiches, which developed a cult following for their distinctive ingredients and affordability.

Additionally, Kmart co-branded with Bruno's Supermarkets to create a new hypermarket chain called American Fare.

Until November 1990, when it was passed by Walmart, Kmart was the second-largest retailer in the United States, after Sears. In the late 1980s and into the 1990s, the corporate office shifted much of its focus from the Kmart stores to other companies it had acquired or created, such as Sports Authority, Builders Square, and Waldenbooks.

Blue Light Special The Blue Light Special was an in-store sales promotion that lasted for a short period during regular hours. It was advertised using a rotating blue light, similar to the style used on police cars, and announced over the public address system with the phrase "Attention, Kmart shoppers", which eventually became a pop culture reference. The original concept was a limited-time offer to sell slower-moving merchandise. First introduced in 1965, the promotion was retired in 1991.

Kmart periodically brought back the Blue Light Special during the 2000s. It was started in 2001, discontinued in 2002, briefly revived in 2005, revived again on Saturdays in 2009 (offering surprise hour-long sales on selected merchandise) and for a final time in November 2015.

1990–2001: New image

In an effort to update its image in 1990, Kmart introduced a new logo. It replaced the old-style italic "K" and turquoise "mart" with a red block letter "K" containing the word "mart" written in script. Kmart began remodeling stores shortly thereafter. That same year, Little Caesars Pizza opened its first in-store restaurant at a Kmart in Rochester, Michigan. Coincidentally, both companies were founded in Garden City, Michigan, Little Caesars in 1959 and Kmart 1962. In 1995, Kmart attempted to reinvent itself by using the short-lived name Today's Kmart. This 1990 logo was eventually replaced in 2004 with the current design.

On July 25, 1991, Kmart opened its first Super Kmart Center (Super Kmart) in Medina Township, Ohio. This location featured a full-service grocery store with a deli, seafood counter, and bakery, alongside general Kmart merchandise. However, the store was downsized in 2011 and closed in early 2012 following poor Christmas 2011 sales. The second ground-up Super Kmart Center opened in Copley Township, Ohio, and featured an in-store video rental center and a carryout Chinese restaurant. This location has also shut down. The last Super Kmart Center in Howland Township, Ohio, closed on April 8, 2018. Besides the Medina and Copley locations, many more Super Kmarts opened nationwide.

The company would again revise its name in 1991 after 14 years, changing slightly to Kmart Corporation.

In 1992, Kmart entered the Eastern European market with the purchase of 13 stores in the former Czechoslovakia. These stores were sold off in 1996.

The company also began to offer exclusive merchandise by Martha Stewart, Kathy Ireland, Jaclyn Smith, Lauren Hutton, and Thalía. Other recognizable brands included exclusively licensed merchandising of products relating to Sesame Street and Disney. Actress and television personality Rosie O'Donnell and actress/director and producer Penny Marshall were among the company's most recognized spokespersons.

In September 1995, Kmart sold its money-losing in-store auto repair centers to Penske Corporation for $112 million to operate them as Penske Auto Centers. Penske later closed the auto repair centers in 2002 as a result of a payment dispute with Kmart.

On April 23, 1997, Kmart opened a new format named Big Kmart, at Brickyard Mall in Chicago, Illinois. The format focused on home fashions, children's apparel, and consumables (The Pantry). Most Kmart stores were remodeled to this format during the late 1990s and the early 2000s. Initially, this approach was successful and sales numbers had grown by 10 to 15% in the Kmart stores converted to the Big Kmart format. During 1997 and 1998, the company either converted regular Kmart stores into or opened outright 1,245 Big Kmart locations. By 1998, 62% of Kmart's stores were Big Kmart locations. In 1998, Kmart acquired 45 former Venture stores and converted them into Big Kmart locations. There was a high of 1,900 Big Kmart stores during the year 2000, compared to about 100 for Super Kmart and another 100 remaining traditional Kmart locations.

The Sports Authority was acquired by Kmart in 1990 and spun off five years later. Kmart's profitability and sales peaked in 1992, and the later decline is attributed to competition with Walmart, Target, and internet shopping. In 1994, Kmart announced they would close 110 stores. Unlike its competitors, such as Walmart and Target, Kmart failed to invest in computer technology to manage its supply chain. Furthermore, Kmart maintained a high dividend, which reduced the amount of money that was available for improving its stores. Many business analysts also faulted the company for failing to create a coherent brand image.

In 1997, Kmart launched the Kmart Cash Card as a replacement for the paper gift certificates and to facilitate the return process. In July 1999, Kmart hired SuperValu and Fleming to distribute $3.9 billion worth of food and other related products to all Kmart stores.

In 2000, Kmart and Capital One launched an all-new co-branded MasterCard as a replacement for the private label Kmart credit cards.

Also in 2000, Kmart expanded the Martha Stewart Everyday Garden Collection to include live plants and seeds. Kmart also launched the Martha Stewart Everyday Kitchen, which is a complete line of housewares essentials.

In July 2000, Kmart closed 72 underperforming stores, while opening 20 new Big Kmart stores, converting 12 regular Kmart stores into Super Kmart Center stores, and opening 5 new Super Kmart Center stores. The company announced a planned major restructuring, in which Kmart would invest in new customer check-out and new inventory management technology and other related systems.

2001: Final year before filling for bankruptcy Kmart would be hit with two separate lawsuits by Japanese video game company Sega and retail competitor Target. In February 2001, Sega would sue Kmart for a claimed failure to pay $2.2 million of $25.9 million for Dreamcast game systems. In August, Target would sue Kmart, claiming that the company's "Dare to Compare" advertising campaign inaccurately compared its own prices with those of Target a majority of the time on in-store signs.