NEW YORK — Kmart Corp. on Thursday received Chicago bankruptcy court approval to amend its $2 billion debtor-in-possession facility, and warned that July had been a ho-hum sales month.
The change to the Troy, Mich.-based discounter’s loan covenants allows the the chain to report deeper net losses without violating the terms of the loan agreement.
Ron Hutchison, Kmart’s chief restructuring officer, disclosed that the company’s sales trends during July continued in the same pattern of declines and losses as May and June.
He made the disclosure following a bankruptcy court hearing in Chicago on Thursday.
The company’s bottom-line results deteriorated in May and June, with May bringing a $96 million net loss and June accruing a $137 million net loss. Same-store sales showed declines as well for each of the four-week periods, with June down 8.7 percent and May down 11.4 percent.
Hutchison said that the retailer’s back-to-school season so far has been disappointing.
However, the new Joe Boxer launch, which targets back-to-school for the Generation Y crowd, hit the stores at the tail end of July. Jim Adamson, chairman and chief executive officer, told WWD recently that sales for Joe Boxer have exceeded expectations. Those sales will be a part of the discounter’s report for August results.
The back-to-school season is a key indicator for the outlook on fall and holiday sales season.