Thursday, September 30, 2004

Sears buys Waipahu Kmart

Sears Roebuck and Co., as part of its strategy to expand business beyond malls, has closed on its purchase of 50 stores from Kmart Holding Corp., including one location in Waipahu.

Sears said it paid 30 percent of the $575.9 million purchase price and will pay the rest on taking possession of the stores next spring, including the Kmart store at 94-825 Lumiaina St.

The Waipahu store is expected to undergo renovation and bear the Sears nameplate by the end of next year, said Chris Brathwaite, a spokesman for Sears.

While the company has not determined how many employees will be needed to staff the new store, the company plans to provide Kmart associates an opportunity to be considered for employment with Sears, Brathwaite said.

The acquisition and renovation of the Waipahu store and others moves Sears closer to its goal of growing its store base outside of malls, said Sears Chief Executive Alan Lacy.

"Our mall-based stores continue to remain very popular, but malls aren't being built like they were in the past," said Brathwaite. "As we looked to grow our business, we had to look beyond the malls."

The newly acquired stores are primarily in large, densely populated markets with home, family and income demographics that are attractive to Sears, the company said.

"Opening more doors in these strategically selected locations allows Sears to compete more effectively in areas closer to the customer," said Senior Vice President Jerry Post.

While Sears customers will find the neighborhood stores will stock traditional Sears products, such as apparel, home appliances, home electronics and home-improvement items, the shopping experience will be different.

The new stores, which will be one story, will be configured more like discount stores than department stores, with shoppers browsing aisles for goods and waiting in line to pay for them at one exit.

Sears has more than 2,300 stores in the United States and Canada and posted revenue of $41.1 billion in 2003.

Kmart officials in Hawaii declined to comment on the transaction, but nationwide the company closed nearly 600 stores and slashed 57,000 jobs before emerging from bankruptcy last year.

Kmart has become profitable since coming out of bankruptcy, but the retailer continues to lose customers to Wal-Mart Stores Inc., Target Corp. and other discount stores.

In recent weeks, it has announced the sale of stores to Home Depot and Sears.



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