Kmart officials say the moves would enhance the productivity of its store base, inventory and information systems. These initiatives also include accelerating certain inventory reductions and redefining Kmart's information technology strategy. "To make Kmart a stronger and more competitive business model, we must improve our return on invested capital and create a heightened sense of urgency around asset productivity," says Chuck Conaway, chairman and CEO.

The company will also accelerate planned inventory reductions through chain-wide clearance sales and liquidation sales at the stores slated to be closed. By the end of 2000, Kmart will have invested a total of $460 million to upgrade its information systems and $210 million to improve its distribution and logistics network. The company is also enlarging two distribution centers and installing new sorting equipment and expanding the number of shipping and receiving doors.

Employees of closed stores will have the opportunity to apply for jobs at other Kmart locations. The company has 2,165 Kmart, Big Kmart and Super Kmart retail outlets in all 50 states, Puerto Rico, Guam and the U.S. Virgin Islands.