It's only been a few months, but the turnaround at Kmart
Not only has the firm emerged from bankruptcy looking trim and fit, it continues to get meaner and leaner as the weeks go by. Today's announcement that Sears
Of course, the recent sales are nothing compared to the hundreds liquidated during the bankruptcy process, but with around 1,500 stores remaining, it makes sense to cut loose the locations that aren't putting up the numbers.
As with the Home Depot sale, the exact number and location of stores isn't quite settled. But nervous employees can take some solace in the fact that the recent deal does include a provision that encourages Sears to offer employment to the Kmart staffers who will be uprooted by the sales.
What this means for shareholders is tougher to determine. Clearly, the market likes these moves. The 14% bump on the Home Depot announcement is matched by a 6% climb today. Kmart has made great strides to regain profitability, but with sales continuing to slide downward -- an inevitable result of downsizing -- how much more profitable can Kmart become? There are very few earnings estimates, and no management guidance, so your guess would be as good as mine.
Its market is crowded with the likes of Kohl's
For more Fool coverage of Kmart:
- See why the firm made nice with Martha.
- Is United Airlines parent UAL (OTC BB: UALAQ) the next Kmart?
- Take a look at what we thought a year ago.