Chain store files largest retail bankruptcy in U.S. history
Buena Vista Home Entertainment and 20th Century Fox Home Entertainment are among the 50 largest unsecured creditors listed in bankruptcy papers filed by Kmart Corp.The nation’s No. 2 video sell-through retailer filed for protection under Chapter 11 on Tuesday in federal Bankruptcy Court for the Northern District of Illinois, in Chicago. Disney’s homevideo arm is owed $56.3 million, according to the filing. Fox is owed $34.2 million. Also listed among the 50 largest creditors is Handleman, a “rackjobber” that distribs music and vid products to sales outlets, which is owed $63.7 million. Gamemaker Nintendo is on the hook for $44.9 million Kmart claimed 7% of the total video sell-through market last year, according to data compiled by Variety sister publication Video Business. The filing by the 2,124-store chain is the largest retail bankruptcy in U.S. history. The discounter has been experiencing financial and operating difficulties since the middle of 2000, and has recently lost ground to competitors Wal-Mart and Target. The retailer reported a loss of $224 million for the third quarter ended Oct. 31, the most recent period for which formal results are available. However, the chain reported that same-store sales fell 2.6% in November, and fell 1% in December. Despite its difficulties, the sheer number of Kmart stores led most video suppliers to ship the retailer sell-through product for the fourth quarter.