The stores to be closed include 271 Kmart discount stores and 12 Kmart Supercenters. In addition one store in Puerto Rico will be closed.
(A spokesperson at Greeneville's Kmart store said this morning that the local store is not affected. "It's not us," she said. -Eds.)
The cuts amount to just under 9 percent of Kmart's work force of about 250,000.
"The decision to close these underperforming stores, which do not meet our financial requirements going forward, is an integral part of the company's reorganization effort," CEO Chuck Conaway said in a statement.
"While the business rationale supporting this action is compelling, we deeply regret the impact these store closings will have on our associates, our customers and the communities where these stores are located."
The Troy-based company released the list after notifying affected employees. Kmart currently operates more than 2,100 stores nationwide.
Kmart said it anticipates that the sales generated from store closings and related cost savings will enhance its cash flow by about $550 million in 2002 and about $45 million annually after that.
Kmart filed for Chapter 11 bankruptcy protection on Jan. 22, following lower-than-expected holiday sales, downgrades by several credit rating agencies and a drop in its stock price.
At the time of the filing, Kmart said it would close a number of unprofitable stores. Analysts predicted anywhere from 250 to 700 stores could close.
Kmart expects to record a charge in the range of $1.1 billion to $1.3 billion, but the closings are expected to improve its earnings before interest, taxes and depreciation by about $31 million a year.
On Wednesday, a bankruptcy court approved $2 billion in additional financing for Kmart, plus up to $150 million in bonuses for employees who help the company get off the rocks.
The $150 million is a ceiling on bonuses Kmart can pay to vice presidents, various middle managers and pharmacists whom it considers crucial to keeping stores in operation.
Union attorney William Widmer ridiculed the notion that more than 9,000 employees are key to Kmart's longevity. He said those likely to get the money were to blame for the company's woes.
Bankruptcy and lease experts say the store closings will be devastating for the smaller stores that share a strip mall with a soon-to-be dark Kmart.
For property owners, it means they have to find ways to fill the space, likely with supermarkets, other discount retailers, health clubs or home improvement stores, said Robert Futterman, CEO of Robert K. Futterman and Associates.
"It throws a real wrench in the works," Futterman said.
It also could take Kmart anywhere from six months to two years to liquidate a store, Futterman said, further damaging the other tenants who might have to deal with an