Kmart Keeps Kutting
By George Anderson
Yesterday was not a good day for Kmart or its headquarters staff.
First, the company announced that Home Depot would be scaling back the number of stores it was buying from the mass merchant. Instead of the hoped-for 24 units that would have brought $365 million to Kmart’s coffers, Home Depot is going to buy between 13 ($173 million) and 19 stores ($288.5 million).
Later, Kmart announced it would reduce its headquarters staff by an additional 10 percent, approximately 220 positions. Kmart has reduced its workforce from 4,000 two years ago to fewer than 2,000 with this latest cut.
A company statement said, “While today’s changes are extremely difficult, these changes better align corporate headquarters support with the improved field organization.”
Howard Davidowitz, chairman of Davidowitz & Associates, told the Detroit News he sees Kmart’s latest job cutting move as a necessary step. “If your business is going away and you are losing all of your customers, you simply have to cut the overhead,” he said. “Given their sales, the job cuts have to be made.”
Moderator’s Comment: What are your thoughts on the
latest Kmart news? What do you think is next for the retailer?
The Detroit News piece brought up the possibility
that one of Kmart’s next real estate deals may be to sell its corporate headquarters
in Troy, Mich. The job cuts made at the retailer have brought the workforce
down to around 2,000 people in a facility intended to house up to 5,500.
Barry M. Klein, chairman of Barry M. Klein Enterprises,
a consultant and brokerage firm said, “Its a prime location with a lot
of clerical offices and open space that would make a great headquarters for
another company.” –
George Anderson – Moderator
Updates The Previously Announced Transaction With Home Depot – Kmart Holding
cuts 220 jobs at Troy headquarters – Detroit News