Kmart Holding Corp.'s sale of 13 stores to The Home Depot Inc. could cost up to 1,200 Kmart employees their jobs in coming months.
Under an agreement announced in June, Kmart will sell no fewer than 13 stores for U.S. $173 million in cash and up to 19 stores for $288.5 million. Nine of the stores already have been sold.
The Kmart employees being laid off will receive no severance pay, company spokesman Steve Pagnani told the Detroit Free Press. They will receive benefits owed to them, such as unused vacation time, he said.
The first three stores Kmart is selling to Home Depot will close later this month. Kmart owned four of the stores. Atlanta, GA, U.S.-based Home Depot paid $59 million for them, giving the Troy-based retailer a net gain of $43 million, the company said in a Securities and Exchange Commission filing.
Home Depot assumed leases on the other nine stores for $114 million, and is expected to close on up to six more leased stores by the end of August.
Kmart, which emerged from bankruptcy in May 2003, has struggled to maintain sales, but has taken advantage of demand for its valuable real estate. In June, the company announced plans to sell 54 of its stores to Sears, Roebuck and Co. for up to $621 million.
Sears plans to occupy those stores by April 2005, when approximately 5,000 more Kmart workers will lose their jobs. (Associated Press)
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