Kmart Holding Corporation (NASDAQ: KMRT) announced today the following update to the previously announced transaction with The Home Depot Inc (NYSE: HD).
As previously announced, Kmart and The Home Depot had initially entered into an agreement that provided for the sale of up to 24 stores for a purchase price of up to $365 million subject to the satisfaction of various conditions.
Following the agreed upon process, the companies have now revised their transaction to provide for the sale of no fewer than 13 stores for $173 million in cash, and up to 19 stores for $288.5 million in cash. Additionally, Kmart has been granted an option to sell certain stores which, if exercised by Kmart, would increase the minimum number of stores sold to 15 and the minimum cash to be received to $214 million. The revision of the transaction was the result of certain closing conditions not being satisfied with respect to certain of the stores.
The sale with respect to 4 of the stores has already been completed and cash proceeds of $59 million have been received from The Home Depot. The sale of an additional nine stores will be completed and cash proceeds received into escrow within the next five days, with such funds to be released to Kmart upon the transfer of occupancy thereof.
Kmart is commencing store-closing sales on those stores sold to The Home Depot promptly upon the consummation of the property sales, and will receive proceeds from the store inventory and fixtures in addition to the sale proceeds from The Home Depot referred to above.
Kmart will announce Second Quarter 2004 earnings on Monday, August 16, 2004.
About Kmart Holding Corporation
Kmart Holding Corporation (NASDAQ: KMRT) and its subsidiaries (together, "Kmart") is a mass merchandising company that offers customers quality products through a portfolio of exclusive brands that include Thalia Sodi, Jaclyn Smith, Joe Boxer, Kathy Ireland, Martha Stewart Everyday, Route 66 and Sesame Street. For more information visit the Company's website at http://www.kmart.com/ .
Cautionary Statement Regarding Forward-Looking Information and Other Matters
Statements or reports made by or on behalf of Kmart which address activities, events or developments that we expect or anticipate may occur in the future are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect, when made, Kmart's current views with respect to current events and financial performance. Such forward-looking statements are based upon assumptions concerning future conditions that may ultimately prove to be inaccurate and involve risks, uncertainties and factors that could cause actual results to differ materially from any anticipated future results, express or implied, by such forward- looking statements. Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, factors relating to Kmart's internal operations and the external environment in which it operates; Kmart's ability to successfully implement business strategies and otherwise fund and execute planned changes in various aspects of the business; marketplace demand for the products of Kmart's key brand partners, as well as the engagement of appropriate new brand partners; changes in consumer spending and Kmart's ability to anticipate buying patterns and implement appropriate inventory strategies; Kmart's ability to reverse its negative same-store sales trend; competitive pressures and other third party actions, including pressures from pricing and other promotional activities of competitors, as well as new competitive store openings; the resolution of allowed claims for which Kmart is obligated to pay cash under the Plan of Reorganization; Kmart's ability to properly monitor its inventory needs in order to timely acquire desired goods in appropriate quantities and/or fulfill labor needs at planned costs; Kmart's ability to attract and retain customers; Kmart's ability to maintain normal terms with vendors and service providers; Kmart's ability to maintain contracts, including leases, that are critical to its operations; Kmart's ability to develop a market niche; regulatory and legal developments; general economic conditions; weather conditions, including those which affect buying patterns of Kmart's customers; other factors affecting business beyond Kmart's control; Kmart's ability to attract, motivate and/or retain key executives and associates; and other risks detailed in Kmart's Securities and Exchange Commission filings. Kmart undertakes no obligation to release publicly the results of any revisions to these forward-looking statements to reflect events or circumstances after the date such statements were made.
SOURCE: Kmart Holding Corporation
CONTACT: Kmart Media Relations, +1-248-463-1021
Web site: http://www.kmart.com/