NEW YORK — An attorney for bankrupt Kmart Corp. said Wednesday after a court hearing that a review of management practices by former executives will likely take until the end of the year to complete.
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The stewardship review, prompted by anonymous letter writers, was expected to be completed by Labor Day. The attorney also said there will be legal actions against some former employees, but didn’t say who or even the basis for the potential lawsuits.
Kmart also is reviewing its staffing levels, Ron Hutchison, chief restructuring officer, said following the same court hearing. The review over the next two months will include company headquarters, distribution centers and stores. Kmart hopes to “align” its staffing with corresponding sales levels, he said. The company isn’t expected to make any major store closing announcements this year since Kmart wanted to keep the stores open to take advantage of fourth quarter sales, typically responsible for 30 percent of annual revenues.
However, sources told WWD that the company was likely to have to close another 200 to 250 stores by the end of its fiscal year in January because of poor sales, low inventory levels and continued loss of market share. The timing of that announcement, they said, will likely be determined by the final count on how many employees are told to stay home.
Kmart already has shuttered 283 of the nearly 2,100 stores it operated when it filed for bankruptcy protection on Jan. 22.
The bankruptcy court extended until next Feb. 23 Kmart’s exclusive right to file a reorganization plan. It was to expire Aug. 7.