Residents, officials react to DHS Kmart closing

The Desert Hot Springs Kmart is closing on October 27, 2019, according to a store manager. This is one of 26 Sears and Kmart stores expected to close.

A manager also confirmed the Little Caesar’s Pizza inside the Kmart is also closing.

It was announced that the sole big box store in the city would be shutting down because Transform Co., the parent company that owns both Kmart and Sears, has continued to heartily struggle financially after emerging from bankruptcy.

The Indio Kmart shut down in 2016. In 2017, a former Desert Hot Springs Kmart employee told News Channel 3’s Joe Galli that the store cut its retail space square footage in half over the past several years.

Desert Hot Springs Mayor Scott Matas said that according to an economic development study from ten years ago, 60 cents of every dollar made in the city is spent somewhere else.

To fill in this soon to be vacant business, Matas said the city is hoping to hire a new economic development manager.

“The economic development manager will be part of that team that will be up front at city hall that will also be going out and looking to fill businesses in Desert Hot Springs that are much-needed, and the Kmart will probably be one of the first tasks,” said Matas.

A statement released by Transform Co. states employees will receive severance, but it’s unclear at this time for how many weeks. The statement also reads that more store closures are possible.

The statement, in full:

Over the past several months, we have worked hard to strengthen our vendor relationships, return our inventory levels to normal, and improve customer satisfaction and operations; however, we have faced a number of challenges returning our stores to sustainable levels of productivity, including differences with Sears Holdings over our purchase agreement and a generally weak retail environment. These challenges have unfortunately affected our performance and limited our strategic choices.

After careful review of where we are today, we believe the right course for the company is to accelerate the expansion of our smaller store formats which includes opening additional Home & Life stores and adding several hundred Sears Hometown stores after the Sears Hometown and Outlet transaction closes. We have made the difficult but necessary decision to close 26 large-format Sears and Kmart stores in late October. The Sears Auto Centers at any of these stores (see * below) will close in late August. Liquidation sales at these stores are expected to begin around August 15.

As we promised, all eligible associates will be offered the same number of weeks of severance as offered to employees of Sears Holdings Corporation prior to that company’s Chapter 11 filing in October 2018.

Following these steps, we will continue to evaluate our network of Sears and Kmart stores and cannot rule out additional store closures in the near term. Our goal remains to return the company to profitability and preserve as many jobs
as possible in the communities we serve.

Customers can use the store locator function on our web sites to find the location of their nearest Kmart and Sears stores.

In the meantime, shoppers News Channel 3’s Kelley Moody spoke with hope another business moves in quickly, but they’re not optimistic. Some customers say they’re concerned about having to travel to Palm Springs for their shopping. Alejandre Santana, an employee at the Herbalife Nutrition store in the same shopping center, said she doesn’t have a car and is worried about transportation across the freeway.

“The money that goes to taxes is to our city, so we spend our money over here and the money stays here so at least we can have better streets,” said Santana, who would prefer to shop local.

Walmart owns 15 acres of land in Desert Hot Springs, according to Matas, but he said there are no plans to build a new store at this time.

Redlands’ Kmart will be the other California store affected by the series of closures.