Kmart (NASDAQ:SHLD) employees believe the company is in the process of shutting down stores as it nears bankruptcy.
According to some store-level staff who spoke with Business Insider, many of the remaining 941 Kmart stores appear to be liquidating items. The chain has already closed one-third of its stores in the last 10 years. In April, the company announced the closure of 68 Kmart and 10 Sears stores this summer.
Kmart has told employees it is undergoing a P2P, or path to profitability, strategy. It seems many don't agree and think each cost-cutting measure, such as layoffs and hour reductions, is part of the plan to ultimately close. Other new phases that staff have noticed include moving all items in the stockroom to the sales floor, reported Business Insider. Once stockrooms empty, stores typically have about nine months before shutting down.
Sears spokesman Howard Riefs denied the rumors, saying Sears Holdings is committed to restoring profitability to Kmart and that the stockroom clearances are meant to improve inventory.
Also looking at talk among the Kmart employee message boards, many staff are saying the clearing of stock rooms is the first sign that a location will be shut down.
"The goal is for our stores to operate more efficiently, deliver improved customer service by enabling our associates to spend more time on the sales floor assisting members and customers, and to drive increased margins. We are already receiving positive feedback from our associates on the changes (e.g., such as their job is now more simple and enjoyable), and we will continue to educate them on the strategy," Reifs told Business Insider.
Back in May, Sears Holdings announced it would back away from closing stores and instead plans to open smaller-format appliance stores, focus on its best product categories, and rethink the Shop Your Way program.
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