What is Kmart? Kmart Review

1. Company Profile:

The originator of modern supermarket-type retail enterprises. Kmart is not well-known outside the United States. The easiest way to introduce this company to Chinese readers is to say that it is the originator of modern supermarket-type retail enterprises.

Kmart is to the retail industry what Ford is to the automobile industry. The industry standard for comprehensive retail enterprises was once created by Kmart. The world's largest supermarket chain, the world's largest retail enterprise, and the world's first company to use a modern supermarket cashier system.

The "originator" of decline, these are all things Kmart should be proud of, but these short sentences should also add three words - "was". Americans have never thought that one day there will be no Kmart in their community. But one day in the future, perhaps, the letters "Kmart" will forever remain in the 20th century.

2. Bankruptcy Cases:

1. Fuse

The trigger that forced Kmart to file for bankruptcy was that its food supplier Fleming Companies decided to suspend supply to it because Kmart did not pay the bill for the past week.

2. Domino Effect

However, Fleming's original shrewdness has now turned into stupidity. Its management did not expect that the extremely cost-effective contract would turn it and Kmart into grasshoppers tied to the same rope. The company, which was listed on the New York Stock Exchange in 1968, has always performed well and is widely favored by investors. However, as Kmart fell into the abyss of bankruptcy, Fleming's stock price, which had reached nearly $38 a year ago, has fallen all the way to $15.5 today.

3. Event Overview

In 1999, Kmart signed a $4.5 billion contract with Fleming's, a supermarket supplier, designating the latter as Kmart's sole food supplier. This contract brought many benefits to Fleming's: first, Fleming's quarter of revenue would have a stable source from then on; second, Kmart and Fleming would settle accounts every seven days, which was much faster than Fleming's usual 30-day settlement speed and also faster than Kmart's settlement cycle with other suppliers. However, for Kmart, this was nothing short of a time bomb. As long as Kmart could not pay the cash in one go and fail to fulfill its obligations under this huge contract, it could be forced into bankruptcy.

After the Christmas and New Year holidays, Kmart had $1.5 billion in accounts payable on its books, so any cash request from anyone would be extremely embarrassing. Retail consultant Walter Robb said that Fleming was one of Kmart's largest and most important suppliers, but Kmart owed it $78 million in goods, which showed how difficult Kmart's situation was. But Kmart couldn't pay a penny, so it had no choice but to file for bankruptcy protection.