Shirley Zhou

Kmart introduction

Kmart (sometimes stylized as K mart or kmart) is a chain of American discount department stores headquartered in Hoffman Estates, Illinois, United States. The chain purchased Sears for $11 billion in 2005, forming a new corporation under the name Sears Holdings Corporation. The company was founded in 1962 and is the third largest discount store chain in North America, behind Walmart and Target, with stores in the United States, Puerto Rico, the U.S. Virgin Islands, and Guam (which houses the world's largest Kmart).

It also used to operate stores in Canada, Mexico, and Eastern Europe. As of February 13, 2016, the company operated a total of 962 Kmart stores. In 2013 it had operated 1,221 in 49 states, Guam, Puerto Rico, and the U.S. Virgin Islands, including 1,196 discount stores, averaging 94,000 sq ft (8,700 m2), and 5 Super Centers, averaging 168,000 sq ft (15,600 m2).

Kmart bankruptcy

In 1999, kmart and supermarket suppliers Fleming company signed a $4.5 billion contract, which has been designated as the only food suppliers kmart.After the Christmas and New Year holidays, kmart have piled up on the books of accounts payable of $1.5 billion, therefore any payment by cash can give it a big problem. Kmart cannot afford it, in addition to file for bankruptcy protection, it has no other choice. Kmart filed for Chapter 11 bankruptcy protection on January 22, 2202.

Corporate scandal

THE TRUTH

During bankruptcy investigations it become obviously that there had been some accounting fraud going on that had stimulate revenue figures by $42.3 million for the second quarter of 2001. This led to similar discrepancies(more than $24 million)in the third and forth quarters as well.

The major play in this scandal turned out to be the buyers who are looking for methods to increase income. They were habitual to receive promotional allowances from venders. However, they were purportedly trying to fraud the Kmart accountants of what the payments were in fact for.

Consequence

Reportedly, the bankruptcy caused job loss

for roughly 67,000 people and Kmart was

forced to sell off or close 600 stores.

Kmart was charged by fraudulent regulators

with prematurely booking promotional

allowances for suppliers.

This scandal targeted eight individuals, only three of them

being Kmart employees, who were accused of helping Kmart permit the promotional allowances prematurely on the basis of providing false information to the company's accounting department.

A number of vendor representatives' co-signed false and misleading accounting documents, executed agreements, and, in some instances, provided false or misleading confirmations to Kmart's independent auditor.

Shirley Zhou

Joseph E. Antonini

Antonini became Chairman in 1984 and CEO of Kmart in 1987. In 1990 many of Kmart's stores were considered to be outdated and in decaying condition, that led Kmart changed their image and logo which was unveiled in September 1990, and stores in 1991., Also in 1990 Antonini Kmart began a major restructuring and remodeling effort. In 1990 Kmart was fighting against Walmart over competition and the company was in financial problems. Kmart said it plans to relocate 800 existing Kmart stores, rather than the previously announced 300. And it will expand 700 others and has slated another 670 for remodeling.To date, Kmart has relocated 300 stores and completed 430 expansions

HISTORY

1960S-1970S

S.S. Kresge Corp. opened the first Kmart store on March 1, 1962

1990–2002: New image

2010–present: Continued decline

and 450 remodelings. At the conclusion of Kmart's rebuilding program there will

be 2,347 larger,

new-look Kmart stores.

In 1987, the Kmart Corporation sold its remaining Kresge and Jupiter stores in the United States to McCrory Stores

2002–09: Collapse and merger with Sears

Blind expansion

In 1984, Kmart bought Builders Square and sold it in 1997.

Kmart acquired PACE membership warehouse supermarket, Sports Authority and OfficeMax in 1989, 1990, 1989 respectively. And they were sold in 1995.

Kmart purchased 13 stores from Czech republic and Slovakia. in 1996, they were sold. At the same year, Kmart acquired Borders book supermarket.Three years later, he sold them.

In 1994, kmart established a joint venture retail enterprises in Mexico and Singapore. In 996, Kmart dissolved the Singapore company and sold Mexican companies in 1997.

Select wrong locations

Location is the key reason that causes

huge differences between Kmart and Walmart. Wal-mart build stores at small towns and towns of suburbs where people are more than 4500 from the beginning. Its diversity of goods and low price attract residents from 40 miles. On the contrary, Kmart select in the center of big cities. Expensive land prices and

labor resulting in high commodity prices. In addition, stores located in the down, which

means that it's hard to find parking

spaces. Consumers don't feel

convenient.

Blind expansion

In 1984, Kmart purchased Builders Square

and Kmart sold it in 1997.

Kmart acquired PACE membership warehouse

supermarkets, Sports authority and OfficeMax in 1989, 1990, 1991 respectively. And they were sold in 1995

In 1992, Kmart purchased 13 stores from Czech republic and Slovakia and they were sold in 1996. Borders bookstore was bought in same year, 3 years later, Kmart sold it.

How did Kmart fall?

Mismanagement and

backward management

Consumers said, when you walk into kmart chain, often see the disorderly goods shelves and skew price tag, even in the middle of the shelf channel often littered with goods, consumer pushing a shopping cart cannot pass.

Bibliography

1. "Kmart." Wikipedia. Wikimedia Foundation, n.d. Web. 26 May 2016.(https://en.wikipedia.org/wiki/Kmart) ---I know the fundamental informations about kmart, the history of it.

2. "Weekly MBA." : Kmart Accounting Scandal. N.p., n.d. Web. 26 May 2016.(http://weeklymba.blogspot.ca/2010/01/kmart-accounting-scandal.html)---Help me to know this scandal and analyze it. To know the truth.

3. http://www.wsj.com/articles/SB869177967655164000---Providing some purchase information of Kmart.

4. "A Financial History of Modern U.S. Corporate Scandals." Google Books. N.p., n.d. Web. 26 May 2016. Give me more

detailed information of Kmart. The bankruptcy of Kmart.

QUESTIONS

1. The ranking of the Kmart.

2. In corporate scandal, how many individuals are Kmart employees.

3. Explain why Kmart fail.

Charles Conaway

Conaway had won many fans

on Wall street as No.2

executive at CVS, where he

helped built drugstore chain

into an industry powerhouse. when he was

hired by Kmart in 2000, Conaway was inheriting a company with a long list of entrenched problems. Including outdated technology and drub stores. Canoway also faced accusations that he misled investors about Kmart's financial problems before bankruptcy filing.