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Minding Your Business: Kmart's Blue Lights Out

Aired January 15, 2003 - 07:51   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


JACK CAFFERTY, CNN ANCHOR: The doors will close at hundreds of Kmart stores. Tens of thousands of people about to lose their jobs. We'll get more on that, and a look at what -- pardon me -- might be moving the markets today.
Andy Serwer is here "Minding Your Business."

Now, Intel's earnings are better than expected, but there are some questions about...

ANDY SERWER, "FORTUNE" MAGAZINE: Yes.

CAFFERTY: ... some of the other parts of that report, huh?

SERWER: That's right. There are always questions. It's all in the call, remember that line...

CAFFERTY: Yes.

SERWER: .... where they were talking about their business going forward?

But a pretty good day yesterday. Shh (ph), we have a stock market going on. Don't tell anyone, I don't want to jinx it. The Dow as up 56 points yesterday.

CAFFERTY: That's a rally?

SERWER: Nothing wrong with that. Well, after four or five days of that -- listen, after four or five days, that's not bad, come on.

CAFFERTY: OK.

SERWER: Fourteen on the Nas (ph), 5 on the S&P.

CAFFERTY: Oh, yes.

SERWER: And you know, yesterday was the three-year anniversary of the all-time high on the Dow. We are down from that high of 11,723, but it may be coming back up.

But we want to talk about Kmart this morning.

CAFFERTY: Yes, that's tough stuff.

SERWER: It really is. And you know, we've talked about this before, but this is a big announcement today; 326 stores, 37,000 jobs lost. We have a map that shows here just exactly where the closings are across the country. Let's take a look. It's just all of the blue is where they close. So, you've got a few states there in the Upper Great Plains, where they're not closing. Every other state, 43 states that are going to be closing their Kmarts. Some states -- Alaska will be Kmart-free. Some people say that might be a good thing actually.

CAFFERTY: Except for the people who work at Kmart there.

SERWER: Except for the people who work there.

CAFFERTY: The bankruptcy judge is kind of behind this right?

SERWER: Right, right.

CAFFERTY: He's saying he wants to see more stores shut down.

SERWER: They're looking to get out of bankruptcy quickly.

Now, I want to talk about how many jobs and how many stores have closed since they've gone bankrupt about a year ago. There you go. This is what they had before bankruptcy; 225,000 jobs, 2,100 stores. Now, look at what you've got. So, you've lost 611 stores, doing the math -- we don't even need Bill Hemmer to do this -- 57,000 jobs lost.

And I went back, Jack, and took a look here at the graveyard of discounters. OK? Discount stores that have shut or closed, gone bankrupt. It's just brutally competitive when you've got Wal-Mart and Target out there. Listen to these names, and people will know these.

CAFFERTY: Sure.

SERWER: Woolworth, Caldor's (ph), Bradley's (ph)...

CAFFERTY: Wow!

SERWER: ... Ames (ph), Montgomery Ward, E.J. Corvettes (ph). That goes back. Remember them?

CAFFERTY: Yes, I do.

SERWER: McCrory's (ph), Riches (ph), Hills (ph), Venture (ph). Some of those are more regional.

CAFFERTY: Unbelievable.

SERWER: You know, we just don't need five, six, seven of these discounters. You've got Sears, Penneys, Wal-Mart, Kmart, Target. And the ones with the momentum, of course, Wal-Mart and Target, and those are the ones that are growing and growing.

CAFFERTY: Until somebody comes along with an idea, like Wal-Mart and Target did, that eventually drove Kmart out.

SERWER: And knocks them off.

CAFFERTY: Brutally... (CROSSTALK)

SERWER: ... competitive.

CAFFERTY: Yes.

SERWER: Or (UNINTELLIGIBLE) uneven.

CAFFERTY: Yes. Keep that rally going.

SERWER: Yes, I hope so.

CAFFERTY: Well, thanks, Andy.

SERWER: OK.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com.







Aired January 15, 2003 - 07:51   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JACK CAFFERTY, CNN ANCHOR: The doors will close at hundreds of Kmart stores. Tens of thousands of people about to lose their jobs. We'll get more on that, and a look at what -- pardon me -- might be moving the markets today.
Andy Serwer is here "Minding Your Business."

Now, Intel's earnings are better than expected, but there are some questions about...

ANDY SERWER, "FORTUNE" MAGAZINE: Yes.

CAFFERTY: ... some of the other parts of that report, huh?

SERWER: That's right. There are always questions. It's all in the call, remember that line...

CAFFERTY: Yes.

SERWER: .... where they were talking about their business going forward?

But a pretty good day yesterday. Shh (ph), we have a stock market going on. Don't tell anyone, I don't want to jinx it. The Dow as up 56 points yesterday.

CAFFERTY: That's a rally?

SERWER: Nothing wrong with that. Well, after four or five days of that -- listen, after four or five days, that's not bad, come on.

CAFFERTY: OK.

SERWER: Fourteen on the Nas (ph), 5 on the S&P.

CAFFERTY: Oh, yes.

SERWER: And you know, yesterday was the three-year anniversary of the all-time high on the Dow. We are down from that high of 11,723, but it may be coming back up.

But we want to talk about Kmart this morning.

CAFFERTY: Yes, that's tough stuff.

SERWER: It really is. And you know, we've talked about this before, but this is a big announcement today; 326 stores, 37,000 jobs lost. We have a map that shows here just exactly where the closings are across the country. Let's take a look. It's just all of the blue is where they close. So, you've got a few states there in the Upper Great Plains, where they're not closing. Every other state, 43 states that are going to be closing their Kmarts. Some states -- Alaska will be Kmart-free. Some people say that might be a good thing actually.

CAFFERTY: Except for the people who work at Kmart there.

SERWER: Except for the people who work there.

CAFFERTY: The bankruptcy judge is kind of behind this right?

SERWER: Right, right.

CAFFERTY: He's saying he wants to see more stores shut down.

SERWER: They're looking to get out of bankruptcy quickly.

Now, I want to talk about how many jobs and how many stores have closed since they've gone bankrupt about a year ago. There you go. This is what they had before bankruptcy; 225,000 jobs, 2,100 stores. Now, look at what you've got. So, you've lost 611 stores, doing the math -- we don't even need Bill Hemmer to do this -- 57,000 jobs lost.

And I went back, Jack, and took a look here at the graveyard of discounters. OK? Discount stores that have shut or closed, gone bankrupt. It's just brutally competitive when you've got Wal-Mart and Target out there. Listen to these names, and people will know these.

CAFFERTY: Sure.

SERWER: Woolworth, Caldor's (ph), Bradley's (ph)...

CAFFERTY: Wow!

SERWER: ... Ames (ph), Montgomery Ward, E.J. Corvettes (ph). That goes back. Remember them?

CAFFERTY: Yes, I do.

SERWER: McCrory's (ph), Riches (ph), Hills (ph), Venture (ph). Some of those are more regional.

CAFFERTY: Unbelievable.

SERWER: You know, we just don't need five, six, seven of these discounters. You've got Sears, Penneys, Wal-Mart, Kmart, Target. And the ones with the momentum, of course, Wal-Mart and Target, and those are the ones that are growing and growing.

CAFFERTY: Until somebody comes along with an idea, like Wal-Mart and Target did, that eventually drove Kmart out.

SERWER: And knocks them off.

CAFFERTY: Brutally... (CROSSTALK)

SERWER: ... competitive.

CAFFERTY: Yes.

SERWER: Or (UNINTELLIGIBLE) uneven.

CAFFERTY: Yes. Keep that rally going.

SERWER: Yes, I hope so.

CAFFERTY: Well, thanks, Andy.

SERWER: OK.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com.