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Monday, 11 March, 2002, 15:45 GMT
Kmart chief resigns
Kmart shop in Dallas, Texas
Kmart appoints a new management team
The chief executive of the bankrupt US retail giant Kmart, Charles Conaway, has resigned.

He will be replaced by current chairman James Adamson, the former fast-food executive who was appointed in January, Kmart said.

"Now that the company has taken the difficult but necessary actions to stabilise its finances and operations, [Mr Adamson] is the right executive to move Kmart forward," said board member Thomas Stallkamp.

Kmart added that it has appointed former Sears and Roebuck executive Julian Day as president and chief operating officer, and Albert Koch, former chairman of restructuring firm Jay Alix & Associates, as chief financial officer.

Top brass reshuffle

News of the shake-up followed Friday's announcement that the retailer is to axe thousands of jobs in an attempt to return to profitability.

The company said on Friday that it would close 284 stores in the United States and Puerto Rico, with the loss of about 22,000 jobs, or 9% of its total workforce.

Kmart, the US' second-biggest discount retailer after Walmart, filed for bankruptcy protection in January, citing lower than expected sales during the Christmas season.

Under US bankruptcy laws, failed companies are given temporary protection from their creditors so as to allow them to restructure.

Analysts had predicted that Kmart would close between 200 and 700 of its 2,100 stores as part of its restructuring plan.

Cash crunch

Analysts have blamed Kmart's collapse in part on its failure to modernise its stores, which allowed arch-rival Walmart to boost its share of the market.

Loss-making Kmart also found itself unable to match its competitors' discounts last year, when the economic downturn was making shoppers more cost-conscious.

Some suppliers stopped serving Kmart late last year amid mounting fears that the company would be unable to pay its bills.

Analysts have said they expect Kmart to emerge successfully from bankruptcy protection.

But the company's financial woes have allowed rival retailer Walmart, owner of the UK's third-biggest supermarket chain Asda, to pull further ahead.

See also:

08 Mar 02 | Business
Kmart to axe 22,000 jobs
22 Jan 02 | Business
Kmart: Death of a retailing icon?
21 Jan 02 | Business
Suppliers desert Kmart
17 Jan 02 | Business
Silence cuts third off Kmart's value
13 Jan 02 | Business
Kmart shares plunge
02 Jan 02 | Business
Kmart slumps on bankruptcy talk
23 Jan 02 | Business
Kmart files for bankruptcy
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