What Happened To Kmart?

Kmart stores were, for a long time, a regular fixture in the USA, so much so that they’d get nods in movies such as Rain Man and Resident Evil. But now, they’ve all disappeared from the mainland. So, just what happened to Kmart?

Here’s What Happened to Kmart

Kmart’s last physical store, in Bridgehampton, New York, closed in October 2024. This chain, generally associated with great value, still has a website and one store in Miami, but 99% of its former locations are closed or occupied by different companies.

So, what happened? Some companies take a nose dive due to terrible leadership. One year a company can be thriving, then a billionaire buys them, and suddenly they’re worth a fraction of their value, mentioning no names. But that’s not what happened here. Instead, it was a slow decline over several years, putting an end to a chain that, in some form or other, had been going since the late 19th Century.

When Did Kmart’s Downfall Start?

Traveling salesman S. S. Kresge founded the first store back in 1897, though up until the 1950s, they were known as Kresge stores. By all accounts, they did rather well, with nearly 700 stores in 1940. And one of the factors involved in their appeal was Kresge’s push to put a cap on item costs, which carried through to Kmart’s reputation as a discount retailer.

The first Kmart store opened in the 1960s, and while the Kresge chain took a hit during the recession, the 2000th store opened in 1981. However, as the ’90s rolled around, it became clear the stores were no longer as profitable as they were.

Why? As reported by CNN, it was a combination of several factors. There was an element of bad management, absolutely, but Kmart was also facing serious competition from other retailers. Amazon, you might think, but the decline started before Amazon was the powerhouse it is today.

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Kmart overstretched itself by buying Sports Authority, a major portion of Office Max. and Borders, selling all three just three years later. In 2002, it filed for bankruptcy protection and merged with Sears in 2005, a company that has its own problems. This merger, worth $11 billion, was a disaster, and the merged companies entered bankruptcy in 2018.

While bankruptcy is not a good thing, it doesn’t always mean the company or companies are dead in the water. Both Sears and Kmart survived, but Kmart was left with 191 stores, a hell of a drop from 2000+. Store after store closed, and you can expect the Miami Kmart to follow suit at some point.

Could Kmart Live Again?

Could Kmart return as a physical chain? It’s possible, if a third-party company bought the brand, but they’d be looking to operate it in a different and more profitable way. So a “new” Kmart might not be the Kmart shoppers knew. There is also a Kmart in Australia, but the two are utterly unrelated despite sharing the same name.

The answer, then, to what happened to Kmart is that a combination of competition and bad business decisions led to its decline.