US discount retailer Kmart Corp has officially emerged from Chapter 11 bankruptcy protection.
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Kmart, the largest US retailer ever to file for bankruptcy, emerges from bankruptcy with 600 fewer stores, US$2bn in financing and a new management team.
The company also named investor Edward Lampert, head of hedge fund ESL Investments, as chairman of its board of directors. ESL Investments owns around half of Kmart’s stock and holds four of the nine seats on the board. Kmart said it appointed James Gooch as vice president and treasurer and is still looking for a chief financial officer.
During the 15 months that it was under bankruptcy court protection, Kmart closed nearly 30% of its 2,100 stores, cut more than 60,000 jobs and replaced its top executives and board of directors.
How well Kmart will fare in the highly competitive discount retail sector remains to be seen. The company posted a $483m loss for March, the third month in a row it has recorded a loss. Kmart’s same-store sales for March fell 7.4%. The retailer hopes to turn a profit next year.
