10 Kmart stores escape the axe, but not Carson's

Ten Kmart stores around the country escaped the bankruptcy ax this week, but Carson City's store remains on the doomed list.

A federal judge on Tuesday approved Kmart Corp.'s plan to close 316 stores and borrow $2 billion as part of its effort to emerge from Chapter 11 bankruptcy .

Carson City's Super Kmart is on the list of stores to be closed, a blow to Carson City's economy and the 153 employees soon to be displaced.

A single mother of three, Virginia Dempsey has been a Kmart employee for five years.

She doesn't know what she will do after the closure, but she will have to start over, and in the grocery business that means a cut in hours.

"Most employers give their bakery-deli people 20 hours to start," she said. The money won't be enough to support a family of four, but Dempsey isn't wasting any time feeling sorry for herself.

"I feel especially bad for the people who have been with the corporation for 15 or 20 years," she said. "Many of these people will have to start over and they'll never make as much money as they're making now. They'll have to build their seniority all over again."

In addition to the Kmart employees losing their Carson City jobs, Dempsey expects a ripple effect throughout the community's other businesses.

"We're one of the bigger stores for local vendors, those that supply chips and bread," she said. "They're losing out too."

Kmart operations manager Chris Urso said a liquidator is expected within the week.

"Morale at the store is pretty good, considering what's going on," he said. "But we're definitely closing. The little bit of hope we had left is gone."

Judge Susan Pierson Sonderby presided over Tuesday's hearing in U. S. Bankruptcy Court. A series of court hearings, about one a month, are scheduled through November in her Illinois courtroom.

The closures were announced Jan. 14 and, once completed, Kmart will operate a total of about 1,500 stores in every state except Alaska. Kmart attorney Jack Butler called the closings fundamental to the corporation's plan to leave bankruptcy in April.

"Kmart's goal is to continue serving as many communities as it can across the country, but it's got to do it on a profitable basis," he said.

Kmart had planned to close 326 stores, but eight were taken off the list after Kmart was able to renegotiate their leases. Two more store closings will be delayed while the company attempts to renegotiate their leases

Despite the odds, local officials are fighting to save Carson City's store.

Joe McCarthy, Carson's economic development and redevelopment manager, said city officials are fighting the closure. As a city representative, he and others at City Hall are trying to be active, but they haven't found the key, McCarthy said.

"We sent corporate a petition with over 300 signatures and the mayor and I sent a letter to Kmart's CEO," he said. "We also filed a letter with bankruptcy court a couple of days ago.

"I fielded over 100 phone calls this weekend, all expressing their dismay at the store's closing," he said. "It's very crucial that Kmart officials understand how important this store is to our community. They need to revisit their decision."

According to records at the Assessor's Office, First Security Bank of Utah purchased the Carson City building from Kmart on Dec. 18, 1995. First Security has since merged with Wells Fargo Bank. Wells Fargo officials have not commented on the building's future.