Kmart currently operates 1,480 stores in North America, and Sears has about 2,400 units. Kmart's report acknowledges that the merger will result in store closings, but is not specific as to how many.
The merger, which will form an entity named Sears Holding Corp., was first announced in November. Shareholders will vote on the measure March 24. The combined companies would form the third-largest US retailer behind Wal-Mart and Home Depot.
During its Q4, which ended Jan. 26, Kmart posted a 4.5% same-store sales decline, an improvement over its 13.5% drop during the same period the year before. The discounter also reported an operating income of $472 million, compared to $497 million over the same year-ago period, and a net income of $309 million, up from $270 million.
Kmart emerged from bankruptcy in May 2003. After it filed the year before, the retailer closed about 600 stores. Last year the company sold 14 properties to Home Depot for $271 million and 45 to Sears for $576 million.
Sears has pushed its off-mall growth in recent years. Its purchase of the Kmarts was an attempt to do that, and last year Sears started rolling out its off-mall Sears Grand concept, which is a department store that also sells food. The retailer now operates four of those units.
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