Kmart to close Lawrence distribution center; more than 100 local jobs to be lost
photo by: Mackenzie Clark
Updated at 4:30 p.m. Thursday
Kmart soon will close its large distribution center in Lawrence, eliminating more than 100 local jobs in the process, the Journal-World has learned.
A source with knowledge of the situation confirmed that the beleaguered retailer has filed a WARN notice — a federal filing required when companies undertake mass layoffs — stating that the Kmart Distribution Center at 2400 Kresge Road will close by the end of March.
The form states that 111 Lawrence-based jobs will be eliminated as part of the closing. The Journal-World on Thursday received a copy of the notice from the City of Lawrence.
The closing will mark the end of a major Lawrence employer that has operated in the area since 1972. Kmart once was one of the largest private employers in Lawrence, and its approximately 1.3 million-square-foot facility is generally considered to be the largest industrial building in Douglas County.
The closing, however, has been rumored for years. Kmart’s parent company, Transform Holdco LLC, also owns Sears. Transform acquired Sears and Kmart out of a bankruptcy proceeding that many retail analysts had expected would require the closing of all Sears and Kmart stores. Transform, owned by the billionaire former Sears CEO Eddie Lampert, vowed to keep several stores open.
However, in recent months, the retailer has been closing more stores. Kmart no longer has any locations that operate in Kansas.
Steve Kelly, vice president of the Lawrence chamber of commerce, said his organization had been monitoring the health of the retailer for years.
“I really feel bad for the people losing their jobs and certainly hope there will be other opportunities for them,” he said.
Kelly said local economic development officials would try to attract another distribution company to the large warehouse facility.
“There is a lot of space there,” Kelly said. “While the facility is not the newest, the location is good.”
The center is located along the Kansas Turnpike, which also is Interstate 70. The facility is only a few minutes away from the West Lawrence turnpike interchange and also has rail line service, Kelly said.
“We think there would be the prospect for another company to come in and more fully utilize the building and maybe have some greater employment prospects,” Kelly said.
Employment levels at the distribution center had declined significantly from their peak. In 2012, when the center was celebrating its 40th anniversary, the company told the Journal-World that the center had more than 300 employees. At that time, it served about 80 Kmart stores in the central U.S., as well as serving as a distribution hub for Kmart’s 10 other distribution centers. Those numbers have since shrunk, but information on how many stores and distribution centers the company now operates wasn’t immediately available. In 2012, the company said about 50 trucks a day departed the facility to stock Kmart stores, while about 50 other trucks arrived to restock the distribution center.
In recent years, the Kmart center had been contracting with third-party retailers to provide distribution service for those smaller companies in addition to Kmart. Some officials thought that strategy might save the center, as small online retailers have created a greater need for third-party distribution centers.
But Kelly said the financial troubles surrounding Sears and Kmart likely made it difficult for the center to attract new customers. Kmart and its parent company filed for bankruptcy in 2002 and again in 2018. Retail analysts have been predicting the company will go out of business for more than two years now.
That type of uncertainty has made it difficult for the Lawrence center to gain positive momentum, Kelly said.
“Hopefully this will settle the water or clear the deck a bit for somebody who may be looking for an opportunity to do something out there,” Kelly said.
A security guard at the entrance to the center told the Journal-World that all administrators had gone home for the day as of 3:30 p.m. Thursday. Only a handful of cars remained in the center’s parking lot.