The Kmart Corporation, based in Troy, Michigan, was the second largest U.S. discount retailer and major competitor to Walmart. The company offered customers quality products through a portfolio of exclusive brands that included Thalia Sodi, Joe Boxer, Martha Stewart Everyday, Route 66 and Sesame Street. Kmart was founded by Sebastian Kresge in Detroit in 1899 and quickly grew. The Kresge company, as it was called, first listed on the New York Stock Exchange (NYSE) in 1918 and 50 years later surpassed $1 billion in sales.
Kmart Stock History
From Kmart’s first listing on the NYSE in 1918 the company traded successfully. It completed IPOs in 1994 for Sports Authority, OfficeMax and Borders Group, Inc, all of which Kmart had acquired. In 1996, Kmart completed $4.7 billion in new financing through a three-year, $3.7 billion credit facility and a $1 billion public offering of 7.75 percent convertible preferred securities. Shares were trading in a $15 to $20 range. However, between 1999 and 2002 the KM stock price suffered as poor performance, strong competition and poor management compounded. The share price slid, hit a brief high of $13.55 in August 2001, before a cash crisis lead Kmart to file for Chapter 11 bankruptcy reorganization on Jan. 22, 2002. Its shares crashed to a low of 66 cents. As Kmart worked through Chapter 11, its shares rebounded rising steadily. The new KRMT stock went public in May 2003 at $15 rising quickly to $130 at the time of the merger with Sears.
Kmart and Sears Merger
In 2004, Kmart and Sears, Roebuck and Co. announced they would merge, a combination that transformed Sears and Kmart into a major new retail company named Sears Holdings Corporation. Sears Holdings became the United State's third largest retailer, with $55 billion in annual revenues, 2,350 main stores, and 1,100 specialty retail stores. The new company is headquartered in the Chicago suburb of Hoffman Estates, Illinois.
Under the terms of the transaction, Kmart shareholders received one share of new Sears Holdings common stock for each Kmart share. Sears shareholders had the right to elect either $50 in cash or 0.5 of a share of Sears Holdings for each Sears, Roebuck share held. The merger was finally approved on March 24, 2005, Sears shares fell $6.06 (about 11 percent) to $50.74 and Kmart shares rose $1.19 (about 1 percent) to $126.02. The new SHLD began trading on the NASDAQ on March 28, 2005 at $131.11 per share.
Combined Group Stock
Since the merger, the new SHLD stock has continued to trade strongly and remained above $100 from 2005 until the heavy stock market falls in late 2008 following the banking crisis. It hit a low in November 2008 of $30.44 per share and a peak in April 2010 of $126 per share. By June 2010, it was trading at $80 per share.
Kmart Stock Trading Innovation
In 2000, Kmart announced that it would offer shares of its common stock directly to its 180 million shoppers on its recently-launched BlueLight.com website. It offered its first shares through Kmart Stock Direct, which was developed jointly with direct stock purchase plan provider StockPower, Inc. Kmart filed a special Direct Stock Purchase Plan (DSPP) with the Securities and Exchange Commission (SEC), and Kmart created a special site. Investors could make an initial investment of $250 and purchase up to $100,000 in stock each year.
- Sears Holdings website: Press release: Sears and Kmart announce merger, November 17th 2004
- Sears Holdings website: Press release: Sears and Kmart merger completed, March 24 2005
- Yahoo Finance website::SHLD historical share price
- Ecommerce Times:,Kmart Bypasses Brokers To Sell Its Stock Online:P Greenberg: Feb 2nd 2000
- Sears Holdings website: 2009 AGM and report
- Shopping trolly image by John Sandoy from Fotolia.com