Kmart says it's "focused on restoring profitability to the company." Employees say it's preparing to declare bankruptcy within a year. As Business Insider reports, Kmart—which has seen sales plummet to less than a third of what they were in 2000—is clearing out stock rooms, putting all merchandise on the sales floor, laying people off, and adopting cost-cutting measures at various locations around the country. Parent company Sears Holdings says the goal is to "refine our inventory replenishment process" and keep employees on the sales floor, where they're apparently happier. "Kmart remains a key piece of our asset portfolio," and reports to the contrary are "rumor and speculation," says a rep. But employees communicating on message boards say it's all part of a liquidation strategy.
"If you go to the purging stock rooms then that means the store will be closing soon no matter what they tell you," one person writes. "Could be a month, maybe six, but they are already in the process of planning for it to close once they put it all out on the sales floor." After sales fell 7.2% in the fourth quarter of 2015, Sears announced 68 Kmart locations would close, leaving fewer than 900 in the US, reports CheatSheet. But employees—some of whom describe locations in desperate need of repair—say even profitable stores are clearing out stock rooms, which is "as clear an indication as any that they do not plan for the Kmart division to be around long." Jonathan Heller at the Street writes that one Kmart store he visited in the Jersey Shore "was an utter ghost town." It's just one more sign of "retail's death spiral," he adds. (Read more Kmart stories.)