No more blue light specials. Attention Kmart shoppers: It’s the end of an era. The last full-size Kmart store in operation in the US mainland will be closing its doors on October 20, 2024. Will Kmart now be online only? Either way, Kmart joins many other retailers that are shuttering stores in 2024.
The Last Full-Size Kmart US Store Will Shut Its Doors
The last physical, full-size Kmart store in the mainland United States is located in Bridgehampton, New York, on Long Island. However, the company has announced this location will close its doors on October 20.
There is a small convenience store version of Kmart in Miami, but it does not offer the complete line that a full-size store does, such as appliances and other large-ticket items.
Additionally, off the US mainland, Kmart also has Guam and the US Virgin Islands. These perform better as they do not face competition from more successful big box stores.
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What Led to Kmart’s Downfall?
Observers say the downfall that led to the closing of all of Kmart’s physical stores in the US resulted from the disastrous 2005 merger of Sears and Kmart. It’s been called another of the numerous iconic retailers that have been killed after purchases by hedge funds and private equity firms. The $11 billion Sears-Kmart merger was engineered by hedge fund operator Eddie Lampert.
At the time of the 2005 merger, Kmart had roughly 1400 stores, and Sears had nearly 900 full-size stores in the US. Lampert focused more on selling off real estate and assets the two companies owned rather than investing in either chain. In addition, Lampert sold off other assets, such as the Craftsman brand of tools, previously sold only at Sears. Lampert’s actions led to a bankruptcy filing in 2018.
After emerging from bankruptcy, Kmart retained 199 stores, and Sears had 231. However, by that time, almost all of each chain’s stores were already doomed.
In addition, Kmart was also doomed by competition from more successful big-box competitors, including Walmart and Target. These chains offered all the clothing, household goods, and tools sold by Kmart and Sears. However, their competitors were bolstered by offering groceries. Their competitors also excelled at online retail.
Over $600m Profit: Will Kmart Continue Online?
In March 2024, Kmart’s CEO John Gualtieri told news.com.au that the company had a record profit of more than $600 million in only six months. Gualtieri told the outlet that Kmart was now less of a retailer and more of a “product development company.”
Gualtieri was referring, in part, to Kmart’s controversial rollout of Kmart’s Anko range at Target.
Kmart also improved its focus on its online business. They developed a new tech platform built on Tealium’s customer data platform (CDP) and the Braze Customer Experience platform. As a result, Kmart saw a 20x improvement in engagements. They are now eyeing generative AI to drive more effectiveness in their content play.
According to According to Kmart and Target CIO, Brad Blyth, the retailer now has 7.5m customers who can be contacted via two or more channels across email, web, and mobile.
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