Kmart: The Rise and Fall
{{#rendered}} {{/rendered}}Kmart Corp. on Tuesday filed for Chapter 11 bankruptcy protection, the largest retailer ever to do so.
The nation's second-largest discount retailer after Wal-Mart Stores Inc. operates more than 2,100 stores, has about 240,000 employees and reported sales of about $37 billion for its fiscal year ended Jan. 31, 2001.
Here is a chronology of the company and its troubles.
{{#rendered}} {{/rendered}}1897 - Sebastian Kresge and John McCrory open ``five and dime'' general merchandise retail stores in Detroit and Memphis.
1899 - Partners split and Kresge founds S.S. Kresge Company in Detroit area, later to become KMart.
1912 - company incorporated as S.S. Kresge Co. By 1950s, Kresge is one of the largest general merchandise retailers in the U.S.
{{#rendered}} {{/rendered}}1962 - company opens first discount store as Kmart in Detroit.
1977 - company name changed to Kmart Corp.
1984-1991 - Kmart adds several lines to its business, including Walden Book Co. and Builders Square in 1984, Payless Drugstores Northwest in 1985, PACE Membership Warehouse in 1989, The Sports Authority in 1990, a 90 percent stake in OfficeMax in 1991, and Borders bookstores in 1992.
{{#rendered}} {{/rendered}}1991 - opens first Super Kmart Center.
1994-1995 - company has brush with bankruptcy amid falling earnings. Kmart sells or spins off OfficeMax, The Sports Authority, Pace and Borders. More than 200 stores closed and Chief Executive Joseph Antonini, architect of the diversification strategy, replaced by Floyd Hall.
1996 - introduces private label credit card.
{{#rendered}} {{/rendered}}1997 - launches Martha Stewart bed and bath product line drawing on popularity of the home furnishings guru.
1998 - acquires 45 former Venture stores and converts them to Big Kmart stores.
1999 - signs pacts with Supervalu Inc. and Fleming Companies Inc. to distribute groceries in all stores nationwide; begins $1 billion stock repurchase program; launches online bluelight.com venture.
{{#rendered}} {{/rendered}}May, 2000 - Charles Conaway, former president of drugstore chain CVS Corp., named Chairman and Chief Executive Officer to succeed Floyd Hall.
July, 2000 - Conaway announces restructuring plan aimed at making stores, inventories and information systems more productive. Some 72 stores closed, affecting about 5,000 employees.
August, 2001 - Kmart cuts prices on 30,000 items in bid to compete with Walmart. Company posts a fiscal second quarter loss of $22 million and cites pricing pressures.
{{#rendered}} {{/rendered}}September, 2001 - Kmart announces plans to shut several distribution centers to improve further the flow of goods from warehouses to stores.
October 11, 2001 - Kmart September same store sales fall 1.8 percent from previous year.
November 8, 2001 - Kmart October same stores sales fall 4.4 percent.
{{#rendered}} {{/rendered}}November 27, 2001 - Kmart reports loss of $224 million on lower sales for its fiscal third quarter ended Oct. 31, citing reduced advertising, and charges from measures taken to overhaul its method of shipping goods to its stores.
December 6, 2001 - Kmart November same stores sales fall 2.6 percent.
December 14, 2001 - Moody's cuts Kmart debt covering $4.7 billion to junk status based on lower than expected November sales.
{{#rendered}} {{/rendered}}January 2, 2002 - Prudential Securities analyst Wayne Hood recommends selling Kmart stock and says he would not be surprised at bankruptcy filing if trends do not improve. Kmart stock closes down 13 percent at $4.74.
January 10 - Kmart reports December same store sales fell one percent, warns that earnings will be below expectations and discloses it in talks with lenders on supplemental financing. Kmart stock closes at $4.20.
JANUARY 11 - Moody's cuts Kmart debt rating again. Kmart stock closes at $3.30.
{{#rendered}} {{/rendered}}January 14 - Kmart board of directors begins meeting to discuss its financial options, including bankruptcy. Moody's and S&P both cut Kmart debt ratings again. Kmart silent on its futures plans or what discussed at board meeting. Kmart stock closes at $2.84.
January 15 - Board of directors continue meeting. Company again silent on its plans and outcome of board meeting. S&P says it is dropping Kmart from its index of 500 top stocks. Kmart stock closes at $2.45.
January 16 - Moody's and S&P again cut Kmart debt ratings. Kmart bonds slide to levels that signal bankruptcy filing could be imminent. Company still silent on its plans. Kmart stock closes at $1.60.
{{#rendered}} {{/rendered}}Jan. 17, 2002 - Kmart breaks a week of silence to announce it has ousted its president, Mark Schwartz, and named director James Adamson as chairman. Conaway remains chief executive. Company also says it is reviewing its liquidity position and talking to lenders about financing.
Jan. 18, 2002 - Kmart stock recovers slightly in reaction to management changes, closing at $1.74 a share.
Jan. 21, 2002 - Fleming Companies Inc., Kmart's sole grocery products supplier, suspends shipments to the retailer after it failed to make its regular weekly payment. Moody's again downgrades the long-term rating for Kmart debt to low junk, citing declining confidence and actions by suppliers. Stock market closed because of U.S. holiday.
{{#rendered}} {{/rendered}}Jan. 22, 2002 - Kmart files for Chapter 11 bankruptcy protection in Chicago, citing rapid erosion of liquidity resulting from poor sales and earnings in the fourth quarter and erosion of supplier confidence. Company says it has secured $2 billion in debtor-in-possession financing, allowing it to continue operating, but says the future of all stores is under review.