In early May of this year, a Kentucky man bought every last inventory item that a Kmart store had in Kentucky. Due to the store closing in only a couple of days, Rankin Paynter decided it would be best to buy everything the store had left and give it away to charity. He donated all items, from office supplies to clothing to Clark County Community Services. He was an unprivileged boy when he was younger only owning a pair of summer slippers as shoes. Now that he makes enough money to buy $200,000 worth of Kmart inventory, he is giving back to those in need.
With Kmart store not selling enough to make up for their cost of goods, they are being forced to close down several stores across the country. Their inventory is just sitting in the warehouse or backroom or even their front of the store without selling. Because Kmart still has debt to pay, they are forced to liquidate everything they have, starting with inventory, to pay off their heavy loans. The cost of holding inventory is higher than having just in time inventory like DELL is known to have started.
Even though there are several factors feeding into their decreasing sales, Kmart’s lack of efficient inventory management is costing them a lot more than just sales.