In early September, Kmart and Sears entered into an agreement that provided for the sale of up to 51 stores for up to $589.7 million in cash. Kmart will continue to operate the stores sold to Sears until March or April 2005, with the exception of the West Palm Beach, FL store that will transfer this fall.
This is the second major property transaction in as many months for Kmart. Last month, Kmart sold 18 stores to the Home Depot Inc. for $271 million.
Kmart emerged from a year-long bankruptcy period early this year amid speculation that the company might be worth more in real estate holdings than it was as a going concern. Since then, Kmart has strung together three consecutive profitable quarters and Kmart leaders say they do not plan any additional store sales.
"We are pleased to complete this transaction with Sears and look forward to operating and providing continued service to our customers at our more than 1,400 locations nationwide," says Julian C. Day, president and chief executive officer of Kmart.
Sears has agreed to consider offering employment to any Kmart employee who desires a position at the converted stores. Store associates at the locations affected by the sale were notified Wednesday.
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