Kmart store on Nimitz Highway to close in March, affecting 141 employees

Nearly 25 years after opening its doors, the Kmart store on Nimitz Highway is getting ready to close.

Sears Holdings Corporation announced Tuesday that the store at 500 Nimitz Highway will close in late March.

That location, Kmart’s first in Hawaii, opened in October 1992, making it one of the first big-box retailers to come to the state.

The closure affects 141 workers, and a liquidation sale starts Thursday.

Shopper Claude Ruth comes to the store once a week to buy “cat food, which I have always bought here, because the price was good.”

He says he will continue to buy items at a different Kmart when the Iwilei store closes.

“This has been a very good store, and I’m sure the community is going to miss it a lot, but it’s business,” he said.

Officials say it had nothing to do with the store’s performance, but rather its lease, which is ending early.

Last July, Sears sold 235 Sears- and Kmart-branded stores to Seritage Growth Properties. As part of the agreement, Seritage then leased the store back to Sears with the right to “recapture space” and terminate the lease early.

“Seritage informed us that they will be exercising that right and hence we will be closing the store,” confirmed Howard Riefs, Sears’ corporate communications director.

Riefs says associates that are eligible will receive severance and have the opportunity to apply for open positions at area Sears or Kmart stores. Most of the associates are part-time or hourly.

Customers with layaway contracts at the store can either pay off the contract early, or transfer their layaway contract to a neighboring store or online, Riefs said. Kmart still has stores in Salt Lake, Waipahu and Kapolei, as well as on the neighbor islands, in Kailua-Kona, Kahului, and Lihue.

“This does entail cancelling the contract and re-creating it. This can be initiated by our customers and done by an associate in-store. We are communicating with our layaway customers as they come in weekly to make their payments. We truly apologize for any customer inconvenience,” Riefs said.

As for the location itself, Seritage has not yet specified what will take its place.

In the meantime, we spoke with a real estate consultant to ask what could come next.

“Anybody that goes into that location has to be a destination location, so it’s got to be some name that is going to draw people to come to that area,” said Stephany Sofos.

Employees are already notifying shoppers of the closure.

“After I asked them about dropping the price on the Christmas items, that’s what she told me. She said, ‘Ma’am, just to let you know we will be closing in March,'” said shopper Madonna Shiroma.

The city says the area is only zoned for business use, and residential use is not permitted.

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