A department store chain originally founded in 1899 by Sebastien Sperling Kresge (1867–1966), a tinware salesman, as the S. S. Kresge Co. The original stores were known as “five and dime” stores, selling all merchandise for either 5 or 10 cents. Kresge previously was in a partnership with J. G. McCrory, a prominent retailer at the time, but quickly set out to open his own stores. Within a decade, he had 85 stores grossing more than $10 million per year, and he incorporated in 1912. In 1918, the company stock was listed on the NEW YORK STOCK EXCHANGE.
The company remained a “variety” store selling inexpensive items throughout its early history. It opened a chain in Canada in the 1920s and remained successful throughout the pre–World War II years because of its low prices and inexpensive product lines. As a result of his success, Kresge founded the Kresge Foundation in 1924. But by the late 1950s, the store chain was being seriously challenged by other retailers, which were becoming more full-service stores and were moving into the suburbs and into newly constructed shopping malls. In 1962, it introduced a new concept store called K-Mart in Garden City, Michigan. The store was a no-frills discounter of a wide array of clothing and other household items and became extremely successful, leading the company to a record $483 million in sales the first year of operation.
Within four years, more than 160 K-Mart stores were opened in addition to the 753 Kresge stores in operation, and sales topped the $1 billion mark. In 1976 alone, the company opened 271 K-Mart stores, the largest amount of retail space ever opened. By 1977, 95 percent of the company’s sales were generated by K-Mart, and the company officially changed its name. The phenomenal expansion hit its peak in 1981, when the company opened its 2,000th store. By the late 1980s, the Kresge stores had been sold, and the company no longer had any links to its former founder or name. The company had become the second leading retailer in the country behind SEARS, ROEBUCK.
In the 1990s, the company began an acquisitions program, adding more retailers to its operations. It acquired the Sports Authority, Builders Square, Borders bookstores, and OfficeMax before subsequently selling them off. But the expansion and loss of market share to the leading retail chain, Wal-Mart, put the company under severe financial pressure, and it filed for Chapter 11 BANKRUPTCY protection in 2002. After reorganizing, it emerged from bankruptcy a year later with new management. In 2004, it was announced that K-Mart would merge with Sears, the largest retail merger in history—creating a rival to number-one retailer Wal-Mart.
See also CHAIN STORES.
- Hendrickson, Robert. The Grand Emporiums: The Illustrated History of America’s Great Department Stores. New York: Stein & Day, 1979.
- Kresge, Stanley S. The S. S. Kresge Story. Racine, Wisc.: Western Publishing, 1979.
- Turner, Marcia Layton. K-Mart’s Ten Deadly Sins: How Incompetence Ruined an American Icon. Hoboken, N.J.: John Wiley & Sons, 2003.