Kmart made poor choices with respect to its real estate. Not just one time, not just a few times, but repeatedly. Why? Some experts remark that the company simply did not foresee the shift in residential neighborhoods that would ultimately draw its customer base away from its shopping centers. Others chastise the company for the city-focused strategy that limited the market area Kmart could draw from. But the fact that the director of shopping center development and marketing at Kmart in the 1990s was jailed for accepting bribes and kickbacks for steering contracts to a particular developer 1 may be even more telling.
Ultimately, however, the company's ability to auction off only 57 of the 283 locations it had up for bid during the spring of 2002 underscores the sense that its properties are not nearly as valuable as the company may have believed. 2 Whether Kmart overpaid for them is unclear, but the fact that no one wanted them surely is. In the end, says Sandra Skrovan, vice president of Retail Forward, Inc., Kmart “finds itself today with a lot of old, undesirable types of locations.”
Interestingly, good or bad, the company apparently wasn't keeping close tabs on where all of those locations were. “Neither Kmart's general counsel nor its real estate department knew how much property the company owned because too many people