The story
Founded by S. S. Kresge in 1962.1
Early years
S. S. Kresge, the founder of the company that would become Kmart, met variety-store pioneer Frank Winfield Woolworth while working as a traveling salesman and selling to all 19 of Woolworth's stores at the time. In 1897, Kresge invested $6,700 saved from his job into a five-and-dime store in Memphis, Tennessee. He jointly owned the first store with his former tinware customer, John G. McCrory. Kresge and McCrory added a second store in downtown Detroit the following year. These were the first S.S. Kresge stores. After two years of partnership, he traded McCrory his share in the Memphis store, plus $3,000, for full ownership of the Detroit store, and formed the Kresge & Wilson Company with his brother-in-law, Charles J. Wilson.
In 1912, Kresge incorporated the S.S. Kresge Company in Delaware with 85 stores. In 1916, Kresge incorporated a new S.S. Kresge Company in Michigan and took over the operations of the original company, becoming the modern-day Kmart company. The company was first listed on the New York Stock Exchange on May 23, 1918. During World War I, Kresge experimented with raising the limit on prices in his stores to $1. By 1924, Kresge was worth approximately $375 million and owned real estate of the approximate value of $100 million. Growth early in the 20th century remained brisk, with 257 stores in 1924, rising to 597 stores by 1929. Kresge retired as president in 1925, continuing as the company's chairman. The Great Depression reduced profitability and resulted in store closings, but the number rose to 682 in 1940. After the war, shopping patterns changed and many customers moved out of the cities into the suburbs.
1960s–1970s
Under the leadership of executive Harry Cunningham, the S.S. Kresge Company opened the first Kmart-branded store, a 27,000-square-foot (2,500-square-meter) location, on January 25, 1962, in San Fernando, California. Referred to by Kresge as a "bantam" Kmart, it was originally intended to be a traditional Kresge store until late in the planning process. This opening occurred just six months before the first Walmart opened. Meanwhile, the first full-sized Kmart, at 80,000 square feet (7,400 square meters), opened on March 1, 1962, at 29600 Ford Road in Garden City, Michigan. Both Cunningham and Sam Walton were inspired by Ann & Hope, which they each visited in 1961. Seventeen more Kmart stores opened in 1962. Kmart Foods, a now-defunct chain of Kmart supermarkets, also opened in that decade. Although the chain continued to open Kmart-branded stores, the company was still officially known as S.S. Kresge Company.
Company founder Kresge died on October 18, 1966, at age 99.
Around the time of the opening of the first Kmart, some poorly performing S.S. Kresge stores were converted to a new "Jupiter Discount Stores" brand, which was conceived as a bare-bones, deep discount outfit. During the 1970s, Kmart put a number of competing retailers out of business. Kresge, Jupiter and Kmart stores mainly competed with other store chains like Zayre, Ames, Bradlees, Caldor, Hills, and those that were operated by MMG-McCrory Stores (McCrory, McLellan, H.L. Green, J.J. Newberry, S.H. Kress, TG&Y, Silver's and eventually G.C. Murphy Co.). In 1977, S.S. Kresge Company changed its name to K Mart Corporation.
1980s: Last Kresge stores
In 1980, Vice Chairman Bernard M. Fauber was elected chairman and CEO of Kmart.
In April 1981, the 2,000th Kmart store opened in Kearny, New Jersey which eventually closed in May 2021. By the end of 1981, there were 2,055 Kmart stores across the United States and Canada.
In 1987, the Kmart Corporation sold its remaining 76 Kresge and Jupiter stores in the United States to McCrory Stores, and the brands were almost entirely discontinued, although Canadian Kresge and Jupiter stores continued to operate until 1994.
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Kmart experimented with co-branding in 1985, when the in-store cafeteria at the store in Canton, Michigan, was converted to a Wendy's. During the 1980s, Kmart's in-store cafeterias and delis also gained popularity for their sub sandwiches, which developed a cult following for their distinctive ingredients and affordability.
Additionally, Kmart co-branded with Bruno's Supermarkets to create a new hypermarket chain called American Fare.
Until November 1990, when it was passed by Walmart, Kmart was the second-largest retailer in the United States, after Sears. In the late 1980s and into the 1990s, the corporate office shifted much of its focus from the Kmart stores to other companies it had acquired or created, such as Sports Authority, Builders Square, and Waldenbooks.
Blue Light Special
The Blue Light Special was an in-store sales promotion that lasted for a short period during regular hours. It was advertised using a rotating blue light, similar to the style used on police cars, and announced over the public address system with the phrase "Attention, Kmart shoppers", which eventually became a pop culture reference. The original concept was a limited-time offer to sell slower-moving merchandise. First introduced in 1965, the promotion was retired in 1991.
Kmart periodically brought back the Blue Light Special during the 2000s. It was started in 2001, discontinued in 2002, briefly revived in 2005, revived again on Saturdays in 2009 (offering surprise hour-long sales on selected merchandise) and for a final time in November 2015.
1990–2001: New image
In an effort to update its image in 1990, Kmart introduced a new logo. It replaced the old-style italic "K" and turquoise "mart" with a red block letter "K" containing the word "mart" written in script. Kmart began remodeling stores shortly thereafter. That same year, Little Caesars Pizza opened its first in-store restaurant at a Kmart in Rochester, Michigan. Coincidentally, both companies were founded in Garden City, Michigan, Little Caesars in 1959 and Kmart 1962. In 1995, Kmart attempted to reinvent itself by using the short-lived name Today's Kmart. This 1990 logo was eventually replaced in 2004 with the current design.
On July 25, 1991, Kmart opened its first Super Kmart Center (Super Kmart) in Medina Township, Ohio. This location featured a full-service grocery store with a deli, seafood counter, and bakery, alongside general Kmart merchandise. However, the store was downsized in 2011 and closed in early 2012 following poor Christmas 2011 sales. The second ground-up Super Kmart Center opened in Copley Township, Ohio, and featured an in-store video rental center and a carryout Chinese restaurant. This location has also shut down. The last Super Kmart Center in Howland Township, Ohio, closed on April 8, 2018. Besides the Medina and Copley locations, many more Super Kmarts opened nationwide.
The company would again revise its name in 1991 after 14 years, changing slightly to Kmart Corporation.
In 1992, Kmart entered the Eastern European market with the purchase of 13 stores in the former Czechoslovakia. These stores were sold off in 1996.
The company also began to offer exclusive merchandise by Martha Stewart, Kathy Ireland, Jaclyn Smith, Lauren Hutton, and Thalía. Other recognizable brands included exclusively licensed merchandising of products relating to Sesame Street and Disney. Actress and television personality Rosie O'Donnell and actress/director and producer Penny Marshall were among the company's most recognized spokespersons.
In September 1995, Kmart sold its money-losing in-store auto repair centers to Penske Corporation for $112 million to operate them as Penske Auto Centers. Penske later closed the auto repair centers in 2002 as a result of a payment dispute with Kmart.
On April 23, 1997, Kmart opened a new format named Big Kmart, at Brickyard Mall in Chicago, Illinois. The format focused on home fashions, children's apparel, and consumables (The Pantry). Most Kmart stores were remodeled to this format during the late 1990s and the early 2000s. Initially, this approach was successful and sales numbers had grown by 10 to 15% in the Kmart stores converted to the Big Kmart format. During 1997 and 1998, the company either converted regular Kmart stores into or opened outright 1,245 Big Kmart locations. By 1998, 62% of Kmart's stores were Big Kmart locations. In 1998, Kmart acquired 45 former Venture stores and converted them into Big Kmart locations. There was a high of 1,900 Big Kmart stores during the year 2000, compared to about 100 for Super Kmart and another 100 remaining traditional Kmart locations.
The Sports Authority was acquired by Kmart in 1990 and spun off five years later.
Kmart's profitability and sales peaked in 1992, and the later decline is attributed to competition with Walmart, Target, and internet shopping. In 1994, Kmart announced they would close 110 stores. Unlike its competitors, such as Walmart and Target, Kmart failed to invest in computer technology to manage its supply chain. Furthermore, Kmart maintained a high dividend, which reduced the amount of money that was available for improving its stores. Many business analysts also faulted the company for failing to create a coherent brand image.
In 1997, Kmart launched the Kmart Cash Card as a replacement for the paper gift certificates and to facilitate the return process.
In July 1999, Kmart hired SuperValu and Fleming to distribute $3.9 billion worth of food and other related products to all Kmart stores.
In 2000, Kmart and Capital One launched an all-new co-branded MasterCard as a replacement for the private label Kmart credit cards.
Also in 2000, Kmart expanded the Martha Stewart Everyday Garden Collection to include live plants and seeds. Kmart also launched the Martha Stewart Everyday Kitchen, which is a complete line of housewares essentials.
In July 2000, Kmart closed 72 underperforming stores, while opening 20 new Big Kmart stores, converting 12 regular Kmart stores into Super Kmart Center stores, and opening 5 new Super Kmart Center stores. The company announced a planned major restructuring, in which Kmart would invest in new customer check-out and new inventory management technology and other related systems.
2001: Final year before filling for bankruptcy
Kmart would be hit with two separate lawsuits by Japanese video game company Sega and retail competitor Target. In February 2001, Sega would sue Kmart for a claimed failure to pay $2.2 million of $25.9 million for Dreamcast game systems. In August, Target would sue Kmart, claiming that the company's "Dare to Compare" advertising campaign inaccurately compared its own prices with those of Target a majority of the time on in-store signs.
In early 2001, Kmart announced plans to phase out the Big Kmart format, shifting focus toward ground-up new builds and Super Center expansions.
On August 18, 2001, Kmart opened a $15 million, 143,000-square-foot supercenter at 1405 South Eastern Avenue in Henderson, Nevada. The store closed at the end of March 2017.
On October 25, 2001, Kmart announced that it is adding 15 new Kmart SuperCenters to its portfolio by November of the year, as part of the company's plan to expand their Kmart SuperCenter store portfolio and make groceries available at stores, bringing the total number of supercenters to 124 by the end of the year. 10 of these added supercenters were converted from traditional Kmart stores within the existing space, and 3 stores were expanded and converted from existing Big Kmart stores.
The two new Kmart SuperCenters opened in late 2001 that was built from the ground up was at 19990 Telegraph Road in Detroit, Michigan, which was opened on November 17th of the year, and 12025 North 32nd Street in Phoenix, Arizona, which was opened on November 10th of the year.
Also in this year, Kmart opened two traditional Kmart stores at 296 Garfield Avenue in Cranston, Rhode Island and 374 Windsor Highway in New Windsor, New York. They were built with the newer exterior style but simply carried the standard Kmart signage and lacked the Big Kmart concept, which was discontinued in early 2001. Both locations were closed by November 2017 as a plan to close 28 Kmart stores.
However, Kmart having filed for bankruptcy in January 2002, the company was unable to open any new Super Kmart Center stores, and construction was halted on others (such as in Mesa, Arizona, Margate, Florida, Town and Country, Missouri, and Albuquerque, New Mexico), no matter how close the stores were to completion. Kmart also signed a $4.5 billion arrangement that year with Fleming, making them the sole food and consumables distributor for the company's stores.
2002–2009: First bankruptcy and merger with Sears
On January 22, 2002, Kmart filed for Chapter 11 bankruptcy protection under the leadership of its then-chairman Charles Conaway and president Mark Schwartz. Conaway, who successfully expanded CVS Corporation, accepted an offer to take the helm at Kmart along with a loan of $5 million (equivalent to $8.95 million in 2025). At the time when it filed for bankruptcy, Kmart operated 2,114 stores across all 50 states in the United States in addition to Puerto Rico, Guam, and the U.S. Virgin Islands, employing about 275,000 people.
In a scandal similar to that involving Enron, Conaway and Schwartz were accused of misleading shareholders and other company officials about the company's financial crisis while making millions and allegedly spending the company's money on airplanes, houses, boats and other luxuries. At a conference for Kmart employees on January 22, Conaway accepted "full blame" for the financial disaster. As Kmart emerged from bankruptcy, Conaway was forced to step down, and was asked to pay back all the loans he had taken.
After dismissing Conaway and Schwartz, Kmart closed more than 300 stores in the U.S., including all the locations in Alaska, and laid off around 34,000 workers as part of the restructuring process. Kmart introduced five prototype stores with a new logo, layout, and lime green and gray color scheme, one in White Lake, Michigan, and four in central Illinois (Peoria, Pekin, Morton and Washington). The new layout was touted as having wider aisles and improved selection and lighting, and the city or town's name was featured under the new Kmart logo at the front entrance. However, Kmart could not afford a full-scale rollout. The lime green prototype was abandoned for the new Kmart "Orange" concept that rolled out at several of its locations throughout the United States in 2006.
While Kmart was going through bankruptcy, a significant amount of Kmart's outstanding debt was purchased by ESL Investments, a hedge fund controlled by Edward Lampert. Lampert worked to accelerate the bankruptcy process.
On October 19, 2002, Kmart opened a store at 250 New Road in Somers Point, New Jersey, its only new location in the year. This store was ultimately the last traditional Kmart that was built from the ground up. The store closed before Christmas in December 2019.
On January 13, 2003, Kmart closed 326 stores due to a lack of profitability and poor sales.
On May 7, 2003, Kmart emerged from bankruptcy. On June 10, 2003, Kmart began trading on the NASDAQ stock market with the ticker symbol of KMRT with Lampert serving as the chairman and with ESL Investments controlling 53% of the new company for an investment of less than $1 billion. Lampert dismissed his concerns that the smaller company would be at a disadvantage, stating "The focus that a lot of people have in retail revolves around sales, but sales without profit do not allow a business to be successful in the long term." He began to improve the company's balance sheet by reducing inventory, cutting costs, and closing underperforming stores. By the fourth quarter of 2003, Kmart posted its first profitable quarter in three years, although it has since returned to an operating loss.
On July 23, 2004, a new Kmart logo featuring a large red "K" with "kmart" in small block letters underneath it was announced. On August 12, 2004, Kmart and E! Entertainment Television announced a new, exclusive, cross-promotional clothing brand called Attention. Attention was launched as a new clothing brand that would be sold only at Kmart stores and would be used to promote E! News Live. Kmart had previously signed a similar deal with the WB Network to have the cast of five WB shows wear Kmart branded clothing during shows.
On November 8, 2004, Kmart launched the Kmart Rewards credit card that is managed by HSBC Bank.
On November 17, 2004, Kmart's management announced its intention to purchase Sears for $11 billion. As part of the merger, the Kmart Holding Corporation (the company that owns Kmart) would be transferred to the new Sears Holdings Corporation and Sears would be purchased by the new Sears Holdings Corporation. The new corporation announced that it would continue to operate stores under both the Sears and Kmart brands. Around this time, Kmart changed its logo from a red K with the script "mart" inside, to the same K with the chain's name in lowercase letters below it. Kmart's headquarters were relocated to Hoffman Estates, Illinois, and in 2012 the sprawling headquarters complex in Troy, Michigan, was acquired by the Forbes Company, which owns the nearby upscale mall, Somerset Collection. No concrete plans for redevelopment of the site had been announced.
In 2005, Sears Holdings Corporation introduced the Sears Essentials store format, which would serve as a Kmart-Sears hybrid. Sears Essentials stores were freestanding (not located at a shopping mall) stores. In 2006, the company discontinued the Sears Essentials name, and renamed all of the Sears Essentials stores as Sears Grand stores.
Kmart started remodeling stores to the "Orange" prototype in 2005. In 2006, the typical white and blue interior of the stores was changed to orange and brown, and shelf heights were lowered to create better sightlines. The remodeled stores contained an appliance department with Kenmore Appliances and most had hardware departments that soldCraftsman tools, which prior to the merger had been exclusive to Sears stores. Some auto centers left vacant by Penske after Kmart filed for bankruptcy had been converted to Sears Auto Centers.
In July 2009, Sears Holdings opened its first Sears-branded appliance store inside a Kmart. The 4,000 sq ft (370 m2) store-within-a-store opened inside the former garden department of a Birmingham, Alabama, Kmart. It was two-thirds the size of the appliance department in most Sears stores, but larger than the 2,500 sq ft (230 m2) appliance department in remodeled Kmart stores.
In October 2009, it was reported that Kmart and Martha Stewart Living Omnimedia failed to come to a new agreement. This came after Stewart made remarks on CNBC that her line at Kmart had deteriorated, particularly after the Sears merger.
In November 2009, Kmart reported its first year-over-year sales increase of 0.5% since 2005, and only the second such increase since 2001.
2010–2018: Kmart and Sears Holdings
During the 2010s, many of Kmart's stores were considered to be outdated and in decaying condition.
On December 27, 2011, Sears Holdings announced that 100 to 120 Sears and Kmart stores would close.
From Wikipedia’s article on Kmart, shared under CC BY-SA 4.0.4