Troy, MI, March 10--Kmart Holdings said it will convert 400 Kmart stores to Sears stores when the two retailers become one.
The $11 billion deal is expected to close on March 24, when it does Kmart and Sears will become Sears Holding Corp.
The name change is aimed at stepping up retail strategies already put in a place at both companies and leveraging the more than 75 million existing customers between them.
In a filing with the Securities and Exchange Commission, Kmart said the stores that will be converted "will most likely be locations that feature customer demographics that are more similar to those of a typical Sears shopper." Many of Kmart's stores date back two and three decades in neighborhoods that are now more conducive to a Sears customer.
The stores also are likely to fall into Sears' new format, Sears Essentials. That's a midsized Sears store that mixes the big-ticket products such as appliances, tools and home electronics with convenience items such as food, health and beauty.
The company had said last year that it will convert at least three Kmart stores into another new Sears format called Sears Grand, which is a super-sized rendition of its department stores.
The filing reiterated Chairman Eddie Lampert's wishes to cross-sell products and services of "a wealth of well-known proprietary and national hardline, home and apparel brands." Those, of course, include Kmart's Martha Stewart, Joe Boxer and Jaclyn Smith products as well as Sears' popular Craftsman, Kenmore and Lands' End merchandise, among others.
As for Kmart's strategy, the company said it plans "to continue building on existing customer relationships, to attract customers back who left during bankruptcy, and to offer an experience that will bring new customers to Kmart," according to the filing.
"Kmart seeks to further develop its apparel and home offerings based on its design and sourcing capabilities," it said. "Management believes that focusing its merchandising and marketing approach on quality and differentiated products will build customer loyalty and further differentiate Kmart stores from those of competitors."
The filing was part of a series of reports to the SEC about the merger as well as Kmart's quarterly results. The company said it made $309 million in the fourth quarter as it substantially pared back costs.
