Kmart Delays SEC Filing, May Restate 2001 Results

Kmart Corp., the largest U.S. retailer to seek protection from creditors, said Wednesday it may need to restate past results after a probe of its accounting practices, leading to fears of further big losses.

Troy, Mich.-based Kmart said its new management needed more time to prepare the company’s annual financial report in light of accounting reviews by the company and the Securities and Exchange Commission. The reviews relate to how the company accounts for rebates, vendor allowances and general liability reserves.

“I think we’re going to see some really big losses in a retrogressive manner,” said Richard Hastings, an analyst at Cyber Credit in New York. “I think it’s going to be pretty unpleasant.”

The discount chain has not reported fourth-quarter results, but it said Wednesday its loss in the fiscal year ended Jan. 31, 2002, would be “significantly higher” than the $244-million loss a year earlier.

Shares of Kmart, the No. 2 discount chain behind Wal-Mart Stores Inc., fell 9 cents, or 6.7%, to $1.25 on the New York Stock Exchange.

Since filing for voluntary Chapter 11 bankruptcy protection in January, Kmart has seen its shares drop about 31%. The stock had traded as high as $13.50 in August.

Kmart has announced plans to close 283 of its 2,114 stores and cut 22,000 jobs.

Since the bankruptcy, the retailer racked up losses in February and March and saw its same-store sales decline. Same-store sales, a key measure of retail performance, exclude results from stores open less than a year.

Kmart had said it would file its 10-K report with the SEC by April30 but now is seeking to file the document on May 15.