Kmart is closing dozens of stores as parent company Sears weathers Chapter 11 bankruptcy. Here's how the discount chain fell from grace.

Jessica TylerOct 25, 2018, 00:54 IST

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Kmart's parent company, Sears Holdings, filed for Chapter 11 bankruptcy protection on October 15. The company says it will close 142 Sears and Kmart stores before the end of the year, and its CEO, Eddie Lampert, has stepped down.
This isn't the first time that Kmart has filed for Chapter 11 bankruptcy protection. It did so once before in the early 2000s, before it became part of Sears in 2005.
For decades before then, Kmart was a hugely successful discount store that had more than 2,000 stores throughout the US.
READ MORE: Inside Sears' death spiral.

Sears Holdings, Kmart's parent company, filed for Chapter 11 bankruptcy protection on October 15.

The company says it will close 142 stores before the end of the year, and its CEO, Eddie Lampert, has stepped down. Lampert is staying on as chairman and is reportedly in talks with at least one potential partner about sharing the burden of a $300 million bankruptcy loan for the company.

Sears has been closing stores and selling off assets following years of crippling sales declines. The company operates 687 Sears and Kmart stores, according to its bankruptcy filing. That's down from nearly 2,000 stores in 2013.

This isn't the first time Kmart has faced bankruptcy. In 2002, it filed for Chapter 11 bankruptcy protection before merging with Sears in 2005. At the time, it was the largest retail merger ever. The combined company's sales have plummeted since then, dropping from $53 billion in 2006 to less than $17 billion last year.

Before things started going downhill, Kmart had thousands of stores across the US.

Here's how Kmart ended up where it is now:

See Kmart is closing dozens of stores as parent company Sears weathers Chapter 11 bankruptcy. Here's how the discount chain fell from grace. >>

The first Kmart discount store was opened in Garden City, Michigan, in 1962 by the S.S. Kresge Company.

Source: New York Times

In its first year, 17 more Kmart stores opened, and sales were upwards of $483 million.

Source: New York Times

S.S. Kresge, the company that started Kmart, changed its name to the Kmart Corporation in 1977.

Source: New York Times

By 1981, there were 2,000 Kmart stores across the country.

Source: New York Times

Kmart spent the 1980s and 1990s buying various retailers, including Waldenbooks, Builders Square, PayLess Drug Stores Northwest, PACE Membership Warehouse, Borders, and Sports Authority.

Source: New York Times

In 1990, Walmart passed Kmart in sales, knocking Kmart down to the third largest retailer.

Source: New York Times

That's when things started going downhill. From 1994 to 1995, Kmart sold off Office Max, Sports Authority, and a number of other retailers it had acquired.

Source: NY Times

In 1995, more than 200 Kmart stores were closed.

Source: New York Times

It began testing new store formats, like Big Kmart, a larger version of traditional Kmart stores. The Big Kmart stores were bigger and brighter than traditional stores, and they sold a bigger variety of products.

Source: New York Times

In late 1999, Kmart launched BlueLight.com, its online store.

Source: New York Times

However, it continued to close stores throughout the 2000s.

Source: New York Times

The company filed for Chapter 11 bankruptcy protection in early 2002.

Source: CNN Money

In 2005, Sears merged with Kmart to create Sears Holdings. At the time, it was the largest retail merger ever.

Source: Business Insider

The combined company's sales have plummeted since then, dropping from $53 billion in 2006 to less than $17 billion last year. Kmart has struggled while competing with Walmart and other discount retailers on price.

Source: Business Insider, Business Insider

Dozens of Kmart stores will be closing by the end of the year in the wake of Sears Holdings' filing for Chapter 11 bankruptcy protection earlier this month.

Source: Business Insider

Meanwhile, many of its stores have fallen into disrepair.

When we visited a New York City Kmart location after the bankruptcy filing, we found the store to be messy, with floors peeling up, dead plants on display, and boxes of merchandise everywhere.

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Kmart is closing dozens of stores as parent company Sears weathers Chapter 11 bankruptcy. Here's how the discount chain fell from grace.

The first Kmart discount store was opened in Garden City, Michigan, in 1962 by the S.S. Kresge Company.

In its first year, 17 more Kmart stores opened, and sales were upwards of $483 million.

S.S. Kresge, the company that started Kmart, changed its name to the Kmart Corporation in 1977.

By 1981, there were 2,000 Kmart stores across the country.

Kmart spent the 1980s and 1990s buying various retailers, including Waldenbooks, Builders Square, PayLess Drug Stores Northwest, PACE Membership Warehouse, Borders, and Sports Authority.

In 1990, Walmart passed Kmart in sales, knocking Kmart down to the third largest retailer.

That's when things started going downhill. From 1994 to 1995, Kmart sold off Office Max, Sports Authority, and a number of other retailers it had acquired.

In 1995, more than 200 Kmart stores were closed.

It began testing new store formats, like Big Kmart, a larger version of traditional Kmart stores. The Big Kmart stores were bigger and brighter than traditional stores, and they sold a bigger variety of products.

In late 1999, Kmart launched BlueLight.com, its online store.

However, it continued to close stores throughout the 2000s.

The company filed for Chapter 11 bankruptcy protection in early 2002.

In 2005, Sears merged with Kmart to create Sears Holdings. At the time, it was the largest retail merger ever.

The combined company's sales have plummeted since then, dropping from $53 billion in 2006 to less than $17 billion last year. Kmart has struggled while competing with Walmart and other discount retailers on price.

Dozens of Kmart stores will be closing by the end of the year in the wake of Sears Holdings' filing for Chapter 11 bankruptcy protection earlier this month.

Meanwhile, many of its stores have fallen into disrepair.

When we visited a New York City Kmart location after the bankruptcy filing, we found the store to be messy, with floors peeling up, dead plants on display, and boxes of merchandise everywhere.