Looming Kmart closures likely to affect Little Caesars

Nov. 4, 2002

DETROIT -- An 11-year partnership between retailer Kmart and Little Caesars, the nation's fourth largest pizza chain, will likely be tested in 2003.

Widely published reports cite anonymous Kmart sources who claim the company could close as many as 567 stores nationwide next year as a result of its ongoing bankruptcy proceedings, which began last January.

Since the partnership began, Little Caesars has installed 509 franchise operations in Kmart stores. Ninety-eight of those sites were lost when Kmart closed 283 stores earlier this year.

Little Caesars still operates 411 sites in Kmart stores (See Little Caesars optimistic Kmart will survive), but neither company will speculate on how many pizza operations might be lost in the impending closures.

"Until we can figure out where the locations are, and until we talk to Kmart about that, I really can't comment on that," said Little Caesar's spokeswoman Lisa Cosnowski. "I have heard also that those numbers (of Kmart closures) might be exaggerated."

According to Kmart's January 2002 bankruptcy filing, it owes Little Caesar Enterprises and its subsidiary, Blue Line Distributing, $5 million. Whether that debt has been reduced over the course of this year is uncertain.

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