NEW YORK — Kmart Corp. is ready to play Manhattan.
The discounter is expected to announce today its plan to lease 140,000 square feet at One Penn Plaza — a site catty-corner from R.H. Macy & Co.’s flagship store — for its first store in Manhattan.
The new unit, which will be one of the largest Kmart stores in the U.S., should open before the 1995 holiday shopping season.
Joseph E. Antonini, chairman, president and chief executive officer of Kmart, is expected to attend a news conference at 11 a.m. to confirm the deal, according to a company spokeswoman.
Kmart executives, as reported, said last month the retailer wanted to add two or three more units in the city within the year and the company would have “no problem” operating a store in Manhattan.
Ike Lagnado, publisher of Tactical Retail Solutions, said the planned Kmart unit in Manhattan “fills a gap” from a price-line standpoint. The store likely should do “particularly well” with hard-lines, such as tools and housewares, and have very little overlap with Macy’s.
“I think it will make the 34th Street area a nucleus of retailing in Manhattan, which it was a couple of decades ago,” Lagnado said. “Kmart is taking a very enlightened view in terms of center-city retailing.”
In coming to Manhattan, Kmart joins in a parade of discounters and moderate-price department stores that have recently entered the city, including Bradlees Inc., which opened its first Manhattan store last month at Union Square.
Other retailers, such as Sears, Roebuck & Co. and J.C. Penney Co., are searching for prospective New York City sites. Kmart already operates a 132,000-square-foot store at Co-Op City in the Bronx, which opened Nov. 21, a unit in Fresh Meadows, Queens, and two stores on Staten Island.
Kmart is expected to move into existing space at the 57-story One Penn Plaza office complex, which will be reconfigured. The Kmart unit will occupy portions of four levels of the building.
Below the One Penn Plaza complex, the Long Island Rail Road and Pennsylvania Railroad stations occupy the entire square block between Seventh and Eighth Avenues on the south side of 34th Street.
With the site above the major train stations, Kmart addresses the demographics of the commuter traffic that passes through, Lagnado said.
Separately, Moody’s Investors Service Tuesday placed $5.1 billion of Kmart Corp.’s long-term debt ratings under review for a possible downgrade. The rating agency based the review on Kmart’s weaker-than-expected results this year and concerns that the competitive environment will make it tough for Kmart to substantially improve.
Moody’s said the review will focus on Kmart’s efforts to improve its image and market position, increase sales growth, rebuild margins and reduce costs. The rating agency will also analyze the effects of Kmart’s store refurbishment program and the outlook for higher-margin fashion.
In addition, Moody’s will consider the effect over $2 billion in proceeds from asset sales will have on debt-protection measurements.
Kmart’s senior unsecured debt and medium term notes are rated A3.

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