This holiday season, keep your eyes on the blue lights, because once the retail rush is over, Kmart is expected to close as many as 567 stores to ring in the New Year. Perhaps not coincidentally, reports say Kmart is restating its earnings, showing larger losses in previous fiscal years than already reported. In the first three months of fiscal year 2001, Kmart raised its losses from $25 million to $233 million. Ouch! Only off by about nine-fold. In the second quarter of that year, Kmart lost $377 million, not the earlier figure of $95 million. Only off four-fold. In the third quarter of FY 2001, Kmart lost $235 million, or $11 million more than previously stated. If these restated losses are right, Kmart underreported its losses by more than half a billion in the first 9 months of FY 2001. Maybe they should replace the blue bulbs to white, so their accountants can see the numbers more clearly next time.
Kmart says it is conducting an ongoing review of its accounting practices and procedures. That would be good, as long as the company still has accounting left to do. For more on the Kmart Kollapse, search this database by “Kmart”, esp. the 11/08/2002 entry.
