Five Michigan Kmart stores, including two in Metro Detroit, are expected to close in early December, company officials announced Tuesday, costing 610 employees their jobs.
The stores slated for shuttering are in Rochester, Madison Heights, Port Huron, Burton, and Flint, according to a statement from Sears Holdings Corp., which runs Kmart. Each location is set to start liquidation sales Sunday.
Most of the associates losing jobs are part-time or hourly. There are 77 in Rochester, 179 in Madison Heights, 188 in Port Huron, 85 in Burton and 81 in Flint, Sears Holdings said. Those eligible are expected to receive a severance and could opt to apply for positions at other area Sears or Kmart stores, officials said Tuesday.
The closures "are part of a series of actions we're taking to reduce on-going expenses, adjust our asset base, and accelerate the transformation of our business model," spokesman Howard Riefs said. "These actions will better enable us to focus our investments on serving our customers and members through integrated retail — at the store, online and in the home."
Last month, Sears said its second-quarter loss widened as it continues to deal with weak sales. The retailer lost $573 million, or $5.39 per share, for the period ended Aug. 2.
Chairman and CEO Edward Lampert said the second-quarter performance was unacceptable, although the chain has showed progress with its transformation. The Illinois company was working to turn itself around with efforts including lowering costs.
The loss of the stores could "devastate" some strip malls and other sites affected by vacancies and less customer traffic, said Ken Dalto, a management consultant and local retail analyst.
"It's going to hurt," he said. "You're going to have real estate going down in the area. It's going to affect other retailers. It's going to hurt those towns because people work there. It's a tax base."
Amid ongoing competition with other rivals that have lured away shoppers, Dalto said he expects more closures to come. "It's not going to end there."
Once known for its blue light specials, the retailer has struggled regionally and faced other closures in recent years.
Lampert, a billionaire hedge fund investor, combined Sears and Kmart in 2005, about two years after he helped bring Kmart out of bankruptcy.
But it has faced mounting pressure from nimbler rivals such as Wal-Mart Stores and Home Depot. Revenue declined 10 percent to $8 billion from $8.87 billion. Sales at Kmart stores open at least a year fell 1.7 percent.
The latest local closures are another blow for Kmart, which evolved from the successful chain of five-and-dime stores Detroiter S.S. Kresge founded in 1899. That led to the first Kmart opening in Garden City in 1962.
The Associated Press contributed.