Kmart and Sears and Their Downfall

The primary Kmart store opened its doors on March 1, 1962, in Garden City, Michigan, which focused on selling a huge product selection at cut-rate prices. Throughout the first 30 years, Kmart was referred to as largest retailer store around, even surpassing its competitor Walmart. Kmart stores were designed to increase store sales by increasing the frequency of customer visits. For three decades Kmart looked like there was doing everything right but when they were growing they were also slipping in to a deep hole. Many factors played in their eventual cutback, but supply chain management was their biggest fault. In the 1990’s growing competitors like Target, Sears, and Home Depot took some Kmart’s market place with Wal-Mart taking the biggest slice.

On January 22, 2002, Kmart Corporation was crowned largest retailer seeking bankruptcy protection. As sales declined after a while due to increased competition, management also was neglecting the corporation’s supply chain operation. This neglect launched a surplus of goods doomed for blue light specials (discount/bargain area) that could ought to be trapped in semi-trucks beds behind the shop since the current products on the shelves weren’t moving.

Can not keep up with the competition and retention of consumers, in January of 2002, Kmart Corporation filed for Chapter 11 bankruptcy protection, bringing about the closing of approximately 600 stores, termination of 57,000 Kmart employees and cancellation of company stock.

Kmart filed for reorganization under the U.S Bankruptcy code and announced they are going to develop a intend to manage the financial needs of their stakeholders. There plans were to cut back in size and restructure the organization. However, even with annuall...

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...et image as well as to be able to justify a slight price premium; what's more , it requires a clear and well defined strategy to allow it to roll appropriate formats in different parts of the retail market. When it stumbled on price, Kmart never matched the ability of Wal-Mart. Kmart desperately should block the continuing threat from Wal-Mart: what this means is focusing much more about compelling entry prices but supplementing these which has a level of added fashion ability and service. There is no sign that Sears will implement all of these changes, but until it lets you do it is going to remain right in the middle of a highly competitive and increasingly pressured retail market.

It almost makes you wonder whether it was the right move of Kmart to accumulate Sears. Was it worth emerging both companies? The rewards and risks interested in this decision making .