A Kmart in Cranberry Mall is one of nine stores in Pennsylvania and 284 across the country that Kmart Corp. intends to close as part of its effort to restructure and emerge stronger from bankruptcy, the retailer said Friday.
The 80 workers at the Cranberry store are among 22,000 jobs to be slashed in 40 states by the nation's third-largest discount retailer, which filed for Chapter 11 bankruptcy protection Jan. 22 in the wake of lower-than-expected holiday sales, downgrades by credit-rating agencies and plummeting stock. Yesterday, Kmart stock closed at $1.29, up five cents.
The retailer said it will shutter 13 percent of its 2,114 stores and reduce its 250,000-person work force by nearly 9 percent. The company hopes to emerge from bankruptcy in July 2003.
In Pennsylvania, Troy, Mich.-based Kmart will now operate 111 stores and employ about 13,200 people, said Laura Mahle, a Kmart spokeswoman.
Including Cranberry, the remaining Pennsylvania stores to be closed include locations in Bloomsburg, Clearfield, New Castle, Philadelphia, Reading, State College, Wilkes Barre and Wyncote. The nine stores scheduled to close in the state employ about 800 people.
Spared from the axe were Pennsylvania's trio of Super Kmarts that have full-service grocery stores inside. They are in South Union Township, Fayette County; Moon Township, Allegheny County; and Hanover in York County.
Mahle said employees will be retained until the respective store's stock is depleted, which the company estimates should take anywhere from 60 to 90 days. "Once the stock depletes, employees will lose their jobs. We're saddened that it's come to this situation," she said.
The Kmart in Cranberry Township is along Route 19 and Freedom Road, and is part of a retail triangle in the heart of the township. Rival Wal-Mart is situated about a quarter-mile to the north, while a recently built Target is about two miles to the east.
The closing came as a surprise to some who thought the Cranberry site would be a mainstay for the floundering retail giant.
"I hadn't heard this was one of the stores that would be closing. I thought they could survive in Cranberry Township. The prices are good," said Shannon Repp, 29, of Whitehall. "It's a sad day for the whole chain. Lots of people will lose their jobs."
The Kmart closing marks the third retailer in the Cranberry Mall to close its doors in the last 24 months. "It's really going to be empty (at the Cranberry Mall). Ames has been closed, there's not going to be much up here," Repp said. The third closing was a National Record Mart store.
Pushing a full shopping cart, Valerie Demase of Harmony said she was disappointed to hear the store was closing. "It's a shame. They have good prices," she said.
The store closings require bankruptcy court approval, and the company expects to approach the court at a March 20 hearing in Chicago. Kmart is expected to take a charge of $1.1 billion to $1.3 billion to cover costs of the restructuring.
Mahle said decisions on the stores was based on profitability requirements, components of which included competition with other stores, age and location of the store and whether it was located in a growth area.
In an effort to revive its fortunes, Kmart turned to Hollywood and critically acclaimed film director Spike Lee to add pizazz to a new advertising campaign focused on establishing a clear brand positioning for the company. The campaign made its debut during the closing ceremonies of the Olympics through several television commercials directed by Lee.
"So far it's (the ad campaign) gone well. We went to him (Lee) because of his films. We wanted to give a different look and feel to the commercials," said Abigail Jacobs, a Kmart advertising spokeswoman.
Tribune-Review Staff Writer Dominick Dirienzo and the Associated Press contributed to this report.
