Citing Losses, Kids Mart Will Shut 97 Stores, Fire Workers
Kids Mart Inc. said Tuesday it will close 97 stores this week and fire 600 workers, resulting in a $5.4-million charge in its third quarter.
The Industry-based retailer, which is having cash-flow problems, also said it’s seeking additional financing, in part to buy merchandise for the holiday season and fund its operations. Failure to get financing, raise cash or cut costs could force the retailer to consider Chapter 11 bankruptcy protection, the company said in a regulatory filing.
The seller of infant and children’s clothing said it’s closing the stores because of continued losses the past year. Its losses reached $8.6 million in the six months ended July 27.
Kids Mart, which was spun off from Woolworth Corp. in June to investor group LFS Acquisition Corp., said it may close up to 10 more stores.
Before the closings, Kids Mart operated 279 stores in 20 states under the names Kids Mart and Little Folks.
Kids Mart is closing its worst-performing stores and others based on geographic, market or cost factors. The staff cuts will come from its distribution center and administrative offices. The company has about 1,800 workers.
Shares of Kids Mart, which have fallen by more than half this year, were unchanged Tuesday at $2.50.
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