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Denise Lockwood
Owner of the Racine County Eye

CALEDONIA, WI – Kmart, 5141 Douglas Ave., will close its doors by mid-December, leaving those employees without a job.

Officials cited a weak retail environment and operational difficulties as the reason for the closure after the chain store.

Greenwich, CT-based TransformCo LLC, a subsidiary of ESL Investments Inc.,  acquired the Illinois-based Sears Holdings Corp., LLC for $5.2 billion in February after it filed a Chapter 11 bankruptcy filing, according to a press release issued by ESL. Sears Holdings Corporation LLC is the parent company of Kmart.

The announcement comes about a year after the Caledonia Kmart building was purchased and leased to Kmart. The chain store count is expected to be about 120 locations by December 2019. A store in Racine shut down in 2017.

Caledonia store initially not on the closure list

In early August, officials with TransformCo stated that they planned to close 26 large-format Kmart stores across the country, but they could not rule out more closings. The Caledonia store was not initially slated to be closed, but Racine County Eye learned that employees were told the store would be closing.

“After careful review, we have made the difficult but necessary decision to close the Kmart store in Racine, Wisconsin. Liquidation sales are expected to begin in mid-September and the store is planned to close by mid-December,” said Larry Costello, public relations director for TransformCo.

In a statement issued earlier this month, the company indicated that it would pay eligible employees the same severance packages as offered to employees of Sears Holdings Corp. before the company filed Chapter 11 in 2018.

Operational difficulties, weak retail environment led to closures, officials say

TransformCo officials said they were working to “strengthen” its vendor relationships, return to normal inventory levels and improve customer satisfaction. But it had difficulty accomplishing those tasks because of productivity issues and “differences with Sears Holdings over our purchase agreement and a generally weak retail environment.”

In a press release, Edward S. Lampert, CEO of ESL stated:

“The best possible outcome has now been realized for all stakeholders, including Sears’ many associates, Shop Your Way members, vendors and other partners. ESL looks forward to a new era at Sears and Kmart that builds on their proud histories, while finding new ways to innovate and grow to adapt to the forces transforming the retail industry. We are ready for this exciting opportunity to help return Sears to profitability and will apply ourselves every day in pursuit of that goal.”

While company officials look to innovate those existing stores not slated for closure, Caledonia will be left with an empty storefront in December. On Thursday a sign was posted on the door indicating that the store would stop taking new layaway contracts.

“We encourage customers to continue shopping on for all their product needs,” Costello said.

When asked how many people worked for the Caledonia store, Costello declined to make any further comment.

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Denise Lockwood

Denise Lockwood has an extensive background in traditional and non-traditional media. She has written for, the Milwaukee Business Journal, Milwaukee Magazine and the Kenosha News.