"It's one of the bigger shutdowns that we've had to contend with," Greg McDonald, executive vice president of Dallas-based Weitzman Group, tells GlobeSt.com. Kmart's 2002 cut eliminated just a handful of the DFW stores, but this time the swath is deep and wide. The retailer has requested a Jan. 28 hearing before bankruptcy court for the Northern District of Illinois. For a related story, click here.

McDonald says it will be discovered that almost all are leased locations when the dust settles on yesterday's announcement. He predicts backfilling won't be nearly as easy as with other retail retreats because the stores are not bundled under one building owner's name, but rather individually owned.

In 2002, Kmart closed 283 stores in its network and stripped 22,000 jobs from the rolls. This shutdown affects 326 stores and one distribution center, taking with it roughly 35,000 jobs in 44 states. Fifty-four locations are in Texas.

Lou Miranda, senior vice president of UCR/ChainLinks in Dallas, says yesterday's cut versus a year ago differs in that "this round has some pretty good locations in mature markets." And those stores afford "opportunities for new retailers and building owners looking for a better and higher use," he adds, noting that there was pent-up demand for the upcoming product in some instances. "It was just a matter of time," he says of the announcement by the one-time industry leader of brand-name products at discount prices.

Tracey Pursell of Weingarten Realty Trust in Houston tells GlobeSt.com that only two of its Kmart-anchored centers--Houston's Interstate 45 and Telephone Road and Chino Hills, CA--will be closing. Not making the hit list were Weingarten-owned centers with Kmart anchors in Raleigh, NC, Lake Charles, LA, San Antonio and Lufkin, TX, she says.

Kmart's regular box runs an average of 90,000 sf, according to Herb Weitzman, president of the Weitzman Group. Double the number for a Big K, of which there 48 on the Texas "to go" list.

The Kmart pullout not only empties the boxes, but also cuts into the profit margin for Dallas-based Fleming Cos., which locked horns last year with the retailer over their supply agreement. A telephone call for comment was not returned before press time.

Kmart started losing its grip on Texas as Wal-Mart and Target fired up major expansions in a state recognized nationally as a must-have market. "There's a lot of competition in the market. The rewards are there for the concept that works out," Ian Pierce, Weitzman's research spokesman says. "Kmart had some problems competing in one of the most competitive areas of retail."

The depth of the shutdown shocked the retail industry, but not the fact more stores would fall. Kmart had alluded to that in press releases issued in Q4 2002. The nation's worst holiday shopping season in three decades certainly played a significant role in the decision making as the retailer logged a 5.7% hit on net sales on a same store basis in comparison to the number a year ago.

James B. Adamson, Kmart chairman and CEO, said in a press release that the additional cuts "mark an important milestone in Kmart's reorganization." The action effectively completes the Chapter 11 agenda, including the financing commitment. Adamson added that final negotiations are underway with stakeholders "regarding the terms of what we believe should be a consensual plan of reorganization." He noted Kmart will meet and possibly surpass the original reorganization goal.