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Kmart to cut 200 jobs at headquarters

DETROIT -- Kmart Holding Corp. said yesterday that it is cutting about 200 jobs at its headquarters as part of ongoing streamlining efforts.

The Troy-based company also lowered the maximum number of stores it plans to sell to The Home Depot Inc. from 24 to 19.

The planned real estate sale had been greeted enthusiastically by Wall Street, so its revision sent Kmart's stock downward. The shares closed at $64.40, down 4.75 percent.

Under the revised agreement with Atlanta-based Home Depot, Kmart will sell no fewer than 13 stores for $173 million in cash and up to 19 stores for $288.5 million. Previously, Kmart said it would sell up to 24 stores for a maximum of $365 million.

Sales of four stores have been completed for $59 million. Payment for an additional nine stores is to be received in escrow within the next five days. Store-closing sales will be held at the sold locations. Kmart declined to identify the stores that have been sold or provide any further comment. Home Depot would not comment on the locations, either, saying Kmart had to inform the stores' employees first.

In a separate statement, Kmart said it was reducing staff at its headquarters by about 10 percent. Its website says 2,400 people work at its headquarters. A spokesman said in February that the number was 2,200 people.

''While today's decision was extremely difficult, these changes better align corporate headquarters support with the improved field organization," Kmart said.

Kmart emerged from bankruptcy in May 2003 with about 1,500 stores -- 600 fewer than before, and has continued to pare down its workforce this year. The company has a total of 144,000 employees, according to the website -- down from 158,000 at the end of January.

Kmart has greatly improved its financial picture since emerging from bankruptcy, but it has struggled to maintain sales in the face of heavy competition from Wal-Mart Stores Inc. and Target Corp.

The company is taking advantage of demand for its valuable real estate. In June, the company announced plans to sell up to 54 of its stores to Sears, Roebuck and Co. for up to $621 million.

Gary Ruffing, a retail consultant at BBK Ltd. and a former Kmart executive, said the job cuts could be a sign the company is preparing to sell its headquarters and move.

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