US discount chain Kmart is to close 13 per cent of its stores and cut nearly 9 per cent of its work force as part of its reorganisation under bankruptcy protection, resulting in a charge of $1.1 billion to $1.3 billion.
The closings, which require bankruptcy court approval, will shutter 284 of the company's 2,114 stores and reduce its 250,000-person work force by 22,000.
Shares of Kmart rose as much as 19 cents, or nearly 15 per cent, to $1.47 in early New York Stock Exchange trading before pulling back to trade 4 cents higher at $1.28.
Kmart filed for voluntary Chapter 11 bankruptcy protection on January 22nd after intense competition from rivals Wal-Mart and Target and weak holiday sales left the retailer strapped for cash.
At the time of its bankruptcy filing, Kmart said it would close underperforming stores. The company aims to emerge from bankruptcy in July 2003.