Kmart to Close 72 Stores and Eliminate 5,800 Jobs : Retailing: Discount chain takes aim at poor-performing outlets. Eight of them are in the Southland.

In another bid to jettison money-losing operations, discount retailer Kmart Corp. said Thursday that it will close 72 of its poorly performing U.S. stores in 23 states, including eight in Southern California.

About 800 Kmart jobs in Southern California and about 5,800 positions nationwide will be eliminated in the new round of store closings. The company closed another 110 stores in 1994, including five in California, eliminating 7,100 jobs.

Kmart will shut the latest stores between August and January. In all, 18 California stores will be closed, including outlets in Fullerton, El Toro, Moreno Valley, Coachella, Oceanside, Palm Springs, Rancho Cucamonga and San Diego.

However, Kmart said it will open 65 new stores in 1995, including three in Southern California--in Canoga Park, San Diego and Aliso Viejo--partly offsetting the net loss of jobs.

The consolidation is yet another attempt by Kmart to reverse its fortunes. In March, responding to pressure from shareholders, Kmart’s board ousted Chief Executive Joseph Antonini. The company has not yet named a successor.

The Troy, Mich.-based retailer has had nine consecutive quarters of disappointing earnings as hard-charging rivals such as Wal-Mart and Target have made gains. Kmart reported a $28-million loss in the first quarter of this year.

The closings will not affect current earnings because the cost of the shutdowns was included in a $1.35-billion store restructuring charge recorded in the fourth quarter of 1993.

While Kmart was expected to eliminate some stores this year, the exact number of closings and the locations were not known until Thursday. Some industry analysts--noting that Kmart has more than 2,200 stores--said the action did not go far enough.

“They’ll have to close a lot more stores to reach a viable base,” said Walter Loeb of Loeb Associates in New York.

“Some of these stores might have been saved if Kmart had done a better job of merchandising in the past,” said analyst Linda Kristiansen at Wertheim Shroder in New York.

Kmart said the targeted stores fell short of the company’s expectations for sales, profit and return on investment. Some of the 72 stores have had to contend with fierce neighborhood competition and others are too old to be renovated, said Kmart spokeswoman Shawn Kahle.

Hourly employees at the targeted stores will receive lump-sum payments of $100 to $1,000, based on years to service, if they remain at their jobs until the stores close, Kahle said. Store managers will receive severance packages that include a year of salary, medical benefits and career counseling.