Troy, MI, Oct. 22--Kmart has reaffirmed its commitment to a fast track reorganization with the objective of emerging from Chapter 11 court protection by July 2003. Kmart¹s comparable store sales trend has also improved significantly in September and the first half of October, aided by successful promotions and store initiatives.
Under a timeline reviewed last week with its board of directors and the three independent statutory committees in its Chapter 11 reorganization case, Kmart expects to complete a comprehensive five year business plan by year end. Thereafter, the company also intends to file a proposed plan of reorganization and disclosure statement with the U.S. Bankruptcy Court for the Northern District of Illinois on or before February 24. As previously reported, the court has extended the period in which Kmart has the exclusive right to file a plan of reorganization through February 28.
"We have provided a timeline to our board and statutory committees that provides for Kmart to emerge from Chapter 11 protection as early as the first half of 2003," said James B. Adamson, Kmart chairman and chief executive officer. "This timeline is aggressive and will require a lot of hard work in a relatively short period of time, but should be doable. I have always believed that this company should not remain under court protection a day longer than necessary, and Kmart''s management team is focused on achieving the operational, financial and legal objectives that must be met for the company to conclude its reorganization.²
In its monthly operating report for the four weeks ended September 25, which was filed with the court and the Securities and Exchange Commission, Kmart reported that its comparable store sales in September declined 6.9% from the same period a year ago. This represents an improvement of 5% from Kmart''s comparable store sales in August. Since its Chapter 11 filing in January, Kmart''s monthly comparable store sales decline has averaged approximately 11%.
"We¹ve been very pleased with the company''s recent same store sales trend, which is showing continued improvement in the first half of October," said Julian Day, Kmart president and COO. "We believe the improved trend has been aided by the success of our Have To Have It promotions in the Chicago and Detroit markets and by the progress we¹ve made in staying in stock in high volume and advertised merchandise.²
In its monthly operating report, Kmart reported that it had availability under its debtor-in-possession (DIP) facility of approximately $1.5 billion as of September 25. The company''s net loss for September was $176 million.
