USA: Cash-Strapped Kmart Hopes For A "Fresh Start"
In a statement, Kmart chiefs confirmed they had secured a $2 billion lifeline which will allow them to keep the firm's 2,114 stores open while they reorganise a business hit by weak sales and poor logistics.
"We are determined to complete our reorganisation as quickly and smoothly as possible, while taking full advantage of this chance to make a fresh start and reposition Kmart for the future," said Charles Conaway, Kmart's chief executive officer.
He added that the decision to declare the 105-year-old company bankrupt was based on several factors, including a rapid decline in its liquidity triggered by Kmart's below-plan sales and earnings in the fourth quarter, the evaporation of the surety bond market and an erosion of supplier confidence.
In its filing, Kmart and its US subsidiaries listed total assets of $17bn at book value and total liabilities of $11.3bn as of the fiscal quarter ended October 31, 2001. Kmart's foreign subsidiaries are not covered by the filing.
Kmart also said today that Ronald Hutchison has been named chief restructuring officer. He and James Adamson, who was elected chairman last week to replace Conaway, will oversee the reorganisation.
Mr Conaway added: "We are determined to complete our reorganisation as quickly and smoothly as possible, while taking full advantage of this chance to make a fresh start and reposition Kmart for the future."
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