Kmart Says It May Have Reversed Skidding Sales

Kmart Corp. Chief Executive James Adamson said Monday that monthly sales at the discount retailer may rise for the first time in more than a year in December as shoppers buy more Martha Stewart merchandise.

Sales at stores open at least a year are expected to be “neutral to slightly positive,” Adamson said. Sales of Martha Stewart items are “doing better on a per-store basis” this year, he said.

Kmart needs to win back shoppers during the holiday shopping season, when most retailers generate their largest percentage of profit and sales, to help with plans to emerge from bankruptcy protection in July. The largest U.S. retailer to make a bankruptcy filing said it will consider stores’ holiday sales, profitability and competition in deciding whether to close more outlets.

“The longer we are in Chapter 11, the more harmful it is,” Adamson said.

Adamson said there was a “weakness” in store sales last week after a stronger showing the previous week. Same-store sales fell less than 5% in October, he said. The company is scheduled to release third-quarter results Thursday.

Kmart shares were unchanged at 59 cents in New York Stock Exchange composite trading.

The Troy, Mich.-based retailer this month began selling Martha Stewart holiday items, including ornaments, wreaths and lights. Martha Stewart brand products, such as housewares, linens and gardening tools, have been among Kmart’s top-selling private-label items.

Stewart, chief executive of Martha Stewart Living Omnimedia Inc., has been under investigation in connection with possible insider trading of shares of ImClone Systems Inc.