The iconic American discount retailer Kmart is about to close its last full-size store in the contiguous United States, marking the end of an era for a company that was once a dominant force in American retail. The closure of the Bridgehampton, New York location signifies the final chapter in Kmart’s long history as a big-box store chain across the mainland United States.
Kmart’s struggle to adapt to new competitors, invest in technology, and the rise of e-commerce led to its gradual decline over the past two decades. As the last full-size Kmart prepares to shut its doors, it leaves behind a legacy that spans over 60 years of serving American consumers with affordable merchandise and blue light specials.
The Final Curtain
The last full-size Kmart store in the contiguous United States is set to close on October 20, 2024. This store is located in the Bridgehampton Commons Mall in Bridgehampton, New York. The closure was confirmed by employees at the store, who shared the news with CBS MoneyWatch. Kimco Realty, the owner of Bridgehampton Commons, has also verified that Kmart will be leaving the shopping center.
Kmart’s Remaining Presence
After the Bridgehampton store closes, Kmart will maintain a minimal presence in the United States. A reduced-size location in Miami, Florida will continue to operate. This smaller format store is more like a convenience store, offering basic necessities in a compact space. Kmart also maintains stores in Guam and the U.S. Virgin Islands, keeping the brand alive in these territories.
Kmart’s Promising Beginnings
Kmart’s story began in 1962 when it opened its first store in Garden City, Michigan, the same year as competitors Walmart and Target. The company experienced rapid growth in its early years. By 1966, just four years after its founding, Kmart’s sales surpassed $1 billion. This impressive start positioned Kmart as a major player in the emerging discount retail sector.
Early Success and Expansion
Building on its strong start, Kmart quickly expanded its presence across the United States. The company became known for its wide range of merchandise, competitive prices, and famous “Blue Light Specials”. These surprise discounts, announced in-store, became a hallmark of the Kmart shopping experience. At its peak, Kmart operated 1,400 stores nationwide, becoming a go-to destination for many American shoppers.
The Challenges Begin
Despite its widespread presence, Kmart began to face significant challenges in the late 1990s and early 2000s. The company struggled with increasing competition from other retailers, particularly Walmart and Target. Kmart found itself in a difficult market position, trapped between the trendier image of Target and the more price-competitive strategy of Walmart. This lack of clear market positioning made it difficult for Kmart to define and attract its target customers.
Technology Lag and Market Position
A key factor in Kmart’s decline was its lack of investment in technology. While competitors were modernizing their operations and supply chains, Kmart lagged behind in technological advancements. This technological gap hindered the company’s ability to compete effectively in an increasingly digital retail environment. Additionally, Kmart’s unclear market position between Target and Walmart made it challenging to establish a unique value proposition for consumers.
E-commerce Challenges
The rise of e-commerce posed another significant challenge to Kmart’s business model. Online retailers, particularly Amazon, began to reshape consumer shopping habits. Many customers found the convenience of online shopping more appealing than visiting physical stores. Kmart struggled to adapt to this changing retail landscape and develop a strong online presence.
The First Bankruptcy
In January 2002, facing mounting financial pressures, Kmart filed for Chapter 11 bankruptcy protection. The company cited intense competition and failed sales and marketing campaigns as reasons for its financial troubles. This bankruptcy filing marked a significant turning point in Kmart’s history. As part of its restructuring efforts, Kmart closed approximately 600 stores and laid off 57,000 employees, dramatically reducing its retail footprint and workforce.
Post-Bankruptcy Struggles
Kmart emerged from Chapter 11 bankruptcy in May 2003, but its troubles were far from over. The company continued to face challenges in the competitive retail landscape. Sales continued to decline sharply, falling from $37 billion in 2000 to $12.1 billion in 2014. This dramatic drop in revenue highlighted the ongoing difficulties Kmart faced in attracting customers and maintaining its market share.
The Sears Merger
In an attempt to revitalize the brand, Kmart acquired Sears in 2005 for $11 billion. This merger, orchestrated by hedge fund manager Eddie Lampert, created Sears Holdings, combining two of America’s most well-known retail brands. The hope was that the combined company would be better positioned to compete in the changing retail environment. However, this union ultimately failed to solve the underlying issues facing both companies.
Post-Merger Struggles
After the merger, Sears Holdings continued to face financial difficulties. The combined company struggled to compete with both brick-and-mortar and online retailers. Store closures became more frequent as the company tried to cut costs and streamline operations. Despite various attempts to turn things around, Sears Holdings could not reverse its declining fortunes.
Second Bankruptcy and Aftermath
The ongoing financial troubles led Sears Holdings to file for Chapter 11 bankruptcy in October 2018. This second bankruptcy filing was a clear sign of the company’s dire situation. Following the bankruptcy, more Kmart and Sears stores were closed across the country. Sears Holdings emerged from bankruptcy in 2022 but continued to shrink its retail footprint, with only about a dozen Sears stores remaining open in the U.S.
The Final Years
In the years following the bankruptcy, Kmart’s presence continued to dwindle. Stores were closed in waves, leaving fewer and fewer locations across the country. Each closure marked another step in the retailer’s retreat from the American landscape. The company that once had over a thousand stores was reduced to just a handful of locations.
The Last Full-Size Store
The Bridgehampton, New York store became Kmart’s last stand in the contiguous United States. This location continued to operate as other stores closed around the country. It served as a reminder of Kmart’s former ubiquity in American retail. The store’s impending closure marks the end of Kmart’s era as a big-box retailer in the mainland U.S., a stark contrast to the over 2,300 locations Kmart boasted at its peak in the 1990s.
Kmart’s Legacy
Kmart leaves behind a significant legacy in American retail history. For decades, it was a household name and a shopping destination for millions. The company introduced innovations like layaway programs and in-store restaurants. Kmart also played a role in shaping American consumer culture through its advertising and promotions. As the last full-size store closes, it symbolizes the end of an era in American retail and the ongoing transformation of the industry.
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