Why Has Kmart Filed For Chapter 11 Bankruptcy ?
In the year 2002 on January 22, K-Mart, the popular chain of retail stores, shocked the world saying that they have filed for bankruptcy. For people, until the previous day, everything seemed fine when they were shopping at K-Mart, and suddenly they hear the news in the morning. There were nearly 2,114 stores in the entire United States that were stocked and running. |
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K-Mart had actually filed for Chapter 11 bankruptcy protection. As of 2010, which is the current year, it still remains to be the largest case of bankruptcy to have been filed ever.
According to popular reviews, K-Mart actually had decided to cut their advertising campaigns in the year 2001. This led to loss of popularity as the retail chain store market was very fierce. And also, K-Mart cut its advertising costs during the holiday season which was another big mistake. Several people did not know what the deals were and there was a very low turn out in K-Mart stores, especially during the holiday season.
Also, K-Mart struggled with several internal organization strife like lack of communications and poor positioning because they were constantly trying to compete with Wal-Mart. When the reorganization was about to happen K-Mart had already secured $2 billion. The company shut down several hundreds of stores and brought down the chain considerably. K-Mart also sold its real estate, and most of consumers from K Mart migrated to Wal-Mart or Target. In the year 2004, K-Mart purchased Sears Holding Corporation and it was a eleven billion dollar deal.
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