CBS News Radio reports Kmart emerged from bankruptcy Tuesday. Over the past 15 months, the struggling retailer has closed 600 stores and cut thousands of jobs. Kmart has also restructured its finances.
The Troy-based retailer has new leadership since filing for protection from its creditors in early 2002. It also has a $2 billion loan to compete against bigger retailers like Wal-Mart and Target.
Company spokesman Jack Ferry confirmed the emergence from bankruptcy had been completed. The company's reorganization plan had been approved by a federal bankruptcy judge April 21.
Investor Edward Lampert's company, ESL Investments, is converting $2 billion in financial claims against Kmart into stock and will own a 49 percent stake in the company.
Kmart entered bankruptcy Jan. 22, 2002, after a poor holiday selling season and a reputation for having cluttered stores and items out of stock. It had 2,114 stores at the time, but now has about 1,500.
The company has rebuilt its corporate structure to streamline purchasing and ensure stores are stocked with popular items. Only 15 employees are now authorized to give final approval to orders, down from 220.
It plans to give store managers more power to decide what items their stores should carry to better meet the wishes of neighborhood shoppers, and also to stress exclusive brands such as Martha Stewart Everyday and Joe Boxer.
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