NEW YORK — Shares of Kmart Holding Corp. fell nearly 10 percent in their first day of trading as a restructured firm.
This story first appeared in the May 8, 2003 issue of WWD. Subscribe Today.
The shares, trading under the ticker symbol KMRT.OB, closed Wednesday at $13.55, down $1.45, in trading on the over-the-counter market, with 651,200 shares changing hands. Shares opened at $15. In intraday trading, Kmart shares rose as high as $15.05 and fell as low as $13.45.
The firm also reported that, aided by the later Easter and a smaller store base, same-store sales in April were up 1.1 percent, the first comparable-store sales gain reported since August 2001, when comps rose 0.2 percent.
As reported, equity holders of old Kmart common shares received nothing upon the firm’s emergence from bankruptcy Tuesday. Those shares, which had been trading on the Pink Sheets electronic quotation system since delistment from the New York Stock Exchange in December, last traded on Tuesday at 10 cents.
About 25 million shares of the reorganized retailer were issued to holders of its pre-petition notes. Another 32 million shares will be distributed to trade vendors, service providers and landlords by June 30.
So far, Kmart doesn’t have enough shareholders to meet the requisite listing requirements for trading on a national exchange, such as Nasdaq. Kmart said it doesn’t expect to be able to satisfy the listing requirements until further share distributions are made.
Upon emergence Tuesday, the discounter’s liquidity position is estimated at $2.7 billion, including net borrowings available (after letters of credit) under its new $2 billion exit financing facility and $1.1 billion in cash. After paying related expenditures in connection with the consummation of the reorganization plan, Kmart said it expects its cash to be in the $750 million range.
In its monthly operating report for the four-week period ended March 26, Kmart said it posted a $483 million loss on sales of $1.9 billion. The loss included a $385 million noncash charge pertaining to the settlement of a rejected contract with Fleming Cos. Inc. As reported, Fleming was Kmart’s food distributor. Fleming has since filed for Chapter 11 bankruptcy court protection following Kmart’s rejection of the distribution contract.
Kmart said comps fell 7.4 percent in the five-week period ended April 2. The company pointed out that because of the shift in the Easter holiday to a later time period this year, those sales were not reflected in the current comps report but were included in last year’s same-store sales numbers.
In addition, inventory clearance sales at the 316 stores Kmart was closing were not included in the same-store sales comparisons.
During its 16-month stay in bankruptcy court, Kmart shuttered 600 stores and shed more than 60,000 jobs.