Kmart Narrows Loss in Quarter

Kmart Holding Corp.’s fiscal third-quarter loss narrowed to $23 million after the company closed more stores during a bankruptcy reorganization. Store sales slumped.

The news sent the discount retailer’s shares down 6%.

The net loss was 26 cents a share in the three months ended Oct. 29. Kmart in the year-earlier period had a net loss of $383 million, or 76 cents a share, before the company reorganized its finances. Revenue dropped 21% to $5.09 billion, the Troy, Mich.-based company said. Sales at stores open at least a year fell 8.6%, their ninth straight decline.

Kmart, which exited bankruptcy protection in May, had lower payroll expenses after shutting 316 stores in the first quarter. The No. 3 U.S. discount retailer has been highlighting brands such as Martha Stewart Everyday housewares in commercials to win back shoppers from Wal-Mart Stores Inc. and Target Corp., which continue to expand.

“It is distressing,” said Walter Loeb, president of New York-based retail consulting firm Loeb Associates. “I am worried about the momentum of the Christmas season.”

Kmart filed for protection from creditors in January 2002 after poor holiday sales and a failed effort to beat Wal-Mart’s low prices. The company shut 599 stores, fired 57,000 workers and shed $7.8 billion in debt during its Chapter 11 reorganization.

Kmart shares fell $1.90 to $29.40 on Nasdaq.