This action is intended to enhance the company's financial and operating performance by allowing it to further reduce costs, improve cash flow, streamline distribution and focus its resources more efficiently, the company believes. Sale proceeds generated from the closings, net of expenses, will enhance the company's cash flow by about $500 million this year, the company says. However, closing the stores will cost $1.7 billion.

Between 30,000 to 35,000 employees will lose their jobs in the closures. There are no more anticipated closings.

Kmart declared bankruptcy early last year and closed more than 280 stores nationwide. Now, the company has 1,500 stores left across the United States, the Caribbean and Guam.

The company plans to complete its reorganization and emerge from Chapter 11 bankruptcy by April 30. The company has received a commitment for up to $2 billion in exit financing from GE Commercial Finance, Fleet Retail Finance Inc. and Bank of America, with the money secured by inventory.

Kmart expects to finalize and file its proposed plan of reorganization and related disclosure statement, which will include a five-year business plan and financial estimates, with the United States Bankruptcy Court for the Northern District of Illinois on or about Jan. 24.

The company is filing motions with the court for a hearing Jan. 28 to, among other actions, seek approval of the store closures.

Chairman and chief executive officer James B. Adamson says he regrets the impact that the closings has on employees, customers and communities.

"This is a necessary and important step," Adamson says. "We don't want to remain in bankruptcy a day longer than necessary."