Kmart filed for Chapter 11 bankruptcy in January 2002 after expanding rapidly during the 1990s.
The retailer had grown into one of the largest discount chains in the United States, but it faced intense competition from Walmart and Target. Kmart also struggled with aging stores, weak merchandising, heavy debt, and declining sales.
Kmart emerged from bankruptcy in 2003 under new ownership and later merged with Sears in 2005 to form Sears Holdings. That merger did not restore the businesses to their former strength, and the combined company entered bankruptcy in 2018.
Kmart is sometimes confused with Sears because both ultimately became part of Sears Holdings. They were separate retailers before the merger, and Kmart’s 2002 bankruptcy occurred several years earlier.