dingojoe

Don't Forget Sears' Housing Connection

Not exactly a ringing endorsement of Kmart quality there. KMart did 19B in sales in 2005, they'll do 15B this year, so people have and will continue to steadily stop going to the stores, and stores will steadily disappear. The store you described is probably on a list to close when the lease ends. It may even be cash flow positive right now since they don't put any capex into it, but the company knows that with capex the number don't work, so bleed some bucks from it until shutdown time. What you described is also a reason why KMart is unpopular with landlord's, who may be willing to give quality tenants rent concessions at this time, but frequently view KMart a drag on the whole development.

As for the 401K, many companies have pulled the match, however, I'm not sure how many of those companies also spend money on stock buybacks. It does not send an impressive signal to employees when management skimps on capex, cuts 401Ks, but has money for stock buybacks. The brighter, more motivated, and more talented ones see the writing on the wall and start jumping ship. Circuit City's demise was probably inevitable, but they hastened it with some boneheaded moves affecting employees. As cash flow keeps getting tighter and sales lower, don't put it past Eddie to start slashing commissions , and if that happens watch out.