Tuesday, January 22, 2002
Steamboat Springs The biggest retail store in Northwest Colorado was open for business as usual Tuesday morning. And officials in Craig are hopeful the Big K store there will not be among the 300 or so Kmart Corp. could close in the coming year as part of its reorganization under Chapter 11 bankruptcy.
"They are the highest sales tax paying business in Craig," City Manager Jim Ferree said. "We only know what we've heard in news reports. We think that store is profitable and consequently won't be one of those underperforming stores they will close. We can't help but think that as the largest retailer in the area, (the Craig store) doesn't fit those criteria."
Kmart has been operating in Craig since 1977 and opened its Big K store Nov. 30, 1993. At 100,365 square feet, it is easily the biggest retail store in a three-county region and more than twice as big as the Wal-Mart in Steamboat Springs.
Ferree pointed out the Craig Big K is a regional shopping magnet, drawing shoppers not only from Routt County but from southern Wyoming and Meeker in neighboring Rio Blanco County. Those regional shoppers bring in dollars from outside the local economy.
The Craig store employs 85 people.
The city of Craig collects 2.25 percent sales tax and is rebated a small fraction of sales tax collected by Moffat County, Ferree said.
Unlike Steamboat, Craig is not solely dependent upon sales tax it also collects property tax.
Craig sustained the loss of a major retailer, Country General, late in 2001.
Ironically, Country General was a tenant of Kmart Corp. in Kmart's original location on Craig's west side.
The assistant manager of the Big K store in Craig, Mark Curtis, talked openly to a reporter on Jan. 15. However, a member of the administrative staff at the Craig store said Tuesday that store managers would no longer talk to the media.
Kmart Corp.'s public affairs staff was not fielding calls on Tuesday, citing the tremendous call volume, and referred members of the news media to the corporate Web site.
Kmart Corp.'s financial struggles have been widely documented as it has steadily lost ground to Wal-Mart and Target on a national basis. Ultimately, it was the announcement on Monday that a major grocery distributor, Fleming Cos., would no longer make shipments to Kmart, that precipitated management's decision to seek Chapter 11 protection.
Grocery sales drive traffic at Kmarts in many large urban centers. The Craig store does not have a full grocery department it does not have meat or produce sections but it does sell grocery items. The Big K in Craig sells milk, cereal and snacks, for example. Steamboat Today could not confirm whether the local store relies on Fleming Cos. for that merchandise.
The fact that Kmart is filing for bankruptcy does not in itself mean any Kmart or big K stores will close.
Instead, it means the company is seeking protection from its creditors while it reorganizes in an effort to return to profitability.
Financial analysts predict that as part of that reorganization, Kmart Corp. will eliminate about 300 of the least profitable among its 2,114 U.S. stores.
Kmart officials said they have secured $2 billion in financing to keep the company going. The company has 275,000 employees. Kmart's stock closed down $1.04 on the New York Stock Exchange Tuesday at 70 cents. Its stock had traded as high as $13.55 last summer.
"We are determined to complete our reorganization as quickly and smoothly as possible," chief executive Chuck Conaway said.
Kmart has $16.3 billion in assets, making it the largest retailer ever to declare bankruptcy.
Editor's note: The Associated Press contributed to this story.