Return to Transcripts main page

CNN Live At Daybreak

Kmart Trying to Comply With Finance Plan

Aired January 22, 2002 - 06:09   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.
CAROL COSTELLO, CNN ANCHOR: Another company with problems this morning, Kmart. "The New York Times" reports Kmart's directors have completed a financing plan that will let the giant retailer stay in business. Jason Hill of CNN affiliate WDIV Detroit has more from there -- Jason.

JASON HILL, WDIV/ DETROIT, MICHIGAN: Good morning Carol. We're here in front of a $20 million Kmart store that opened up recently over the past year, and here in the parking lot, quite a number of people have gathered here to support this local company here from the Detroit metropolitan area in their time of financial trouble.

Now Kmart apparently missed a $70 million payment to one of its largest suppliers, and that means that they won't be getting a number of goods including produce. That means shelves may be becoming more and more bare as time moves on. Now from what we understand, executives at Kmart have come to a conclusion and decided to file for bankruptcy to protect them from a lot of their debtors.

Now from what we understand, they plan on filing later on this morning. They also are questing whether or not major names like Martha Stewart will also pull out. They are also looking to get a $2 billion loan to help them operate during this time of bankruptcy. The future of Kmart, as of right now, totally unknown. Carol, back to you.

COSTELLO: Jason, I'm just curious, what exactly is that directly behind you, that vehicle?

HILL: That vehicle is part of an organization called Blight Busters. Now Blight Busters works in our community here in the Detroit metropolitan area rebuilding homes in different neighborhoods, and they have had the support of Kmart through the years, and they want to come out and urge many metro Detroiters, as well as folks around the nation to shop at Kmart, and possibly even buy some stock, even though they are facing bankruptcy, they're just saying it's a way for shoppers and supporters of Kmart through the years to come through for the company during these financial troubles.

COSTELLO: So if Kmart does go by the wayside in Detroit, it will affect the community, and maybe put a lot of people out of work too.

HILL: You're absolutely right, and that's another reason Blight Busters is here at this particular Kmart in Detroit. They say that at this particular store 300 employees work here and live in the community. So if Kmart goes under, that means there's going to be some major problems for communities like Detroit and around the country.

COSTELLO: And Kmart has deep roots there because the very first Kmart store opened in Detroit -- right?

HILL: That's exactly right, just over a century ago, so Kmart has some very deep roots here in the Detroit metropolitan area, and we're feeling a major effect from these financial troubles that they're having.

COSTELLO: So is there a big Wal-Mart store near there?

HILL: Yes.

COSTELLO: Yes. And a Target store?

HILL: You better believe it. Obviously Kmart executives want to strengthen Kmart to compete with these stores because, obviously, they have participated in these financial troubles that Kmart is facing right now.

COSTELLO: Which will be difficult to do because if you don't pay your suppliers, they don't deliver goods ...

HILL: Now ...

COSTELLO: ... and Kmart will have nothing to sell.

HILL: Well that's exactly right, and that's a fear of many people in the community. From what we understand, a lot of perishable goods that have been -- are en route actually to Kmart right now will continue. However, other goods behind that will not come until they feel that Kmart is financially stable enough to pay their bill. So if they don't get the goods, that means shelves will be bare at Kmarts here in Detroit as well as around the country.

COSTELLO: All right, Jason Hill reporting live for us from Detroit from our friends WDIV, a television station there. Thank you Jason.

HILL: You're welcome Carol.

COSTELLO: Kmart may be rushing to raise last-minute funds to stay in business.

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