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Steve Wagner, Forum Communications, Published June 27 2012

Bemidji Kmart store closing due to 'poor performance'

BEMIDJI – After 35 years in business, the Kmart store here will close its doors.

The retail giant said Wednesday that it won’t renew the lease for the store, 1201 Paul Bunyan Drive N.W., attached to the Paul Bunyan Mall.

Store manager Tim Hayen said he was informed of the closing Tuesday and has talked with store employees to let them know.

The store, which opened in 1977, employs 50-60 employees, most of whom are part-time.

“I’m still trying to grasp all of this,” said Hayen, adding that employees also were surprised by the news. “I’m in the infancy of all of this. I’m still getting information.”

He also said the 96,100-square-foot store was an above average performer and referred additional questions to Sears Holding Co., the parent company of Kmart.

Kim Freely, a spokesperson for Sears Holding, said the lease would not be renewed due to “poor performance.”

“We continually evaluate our store portfolio and make decisions accordingly,” Freely said Wednesday.

An out-of-business sale will begin July 8, and “barring unforeseen circumstances,” the store’s doors would by shuttered by the end of September, she said.

The closing is part of a wider announcement last December to close 100 to 120 stores nationwide, Freely said.

“They were not all announced at that time,” she said.

Initially, Sears Holding announced 79 of the store closings, including in the Minnesota cities of Duluth, Willmar, New Hope and White Bear Lake. The Bemidji store was not on the list of closures.

Store employees can apply for openings at other nearby Sears and Kmart stores, Freely said.

The news marks the second large retailer in Bemidji to liquidate this year.

Pamida, 200 Paul Bunyan Drive, closed at the end of February after announcing in late 2011 that it would close.

Dave Hengel, executive director of Greater Bemidji, said there is intense competition among big box retailers.

Chains like Kmart and Pamida have struggled to compete nationally, and even globally, he said.

The biggest impact on the area will be the lost jobs, Hengel said.

It also creates a vacancy – and opportunity – for the Paul Bunyan Mall, which is owned by Beachwood, Ohio-based DDR Corp.

Kmart is the mall’s largest tenant with nearly 60 percent more space than the next largest store. Other major tenants at the mall are Herberger’s (56,392 square feet), JC Penney’s (48,364) and Jo-Ann Fabric and Craft (14,765).

Currently, there are 10 openings at the mall, with available space ranging from 170 to 4,260 square feet, according to the DDR website.

“You lose an anchor tenant and it’s pretty significant,” Hengel said. “I imagine they are on the fast track in finding a replacement.

“It’s a significant spot in terms of visibility. They are going to have to replace it with a traffic generating store.”

Marty Richmond, the vice president of DDR’s corporate communications, could not be reached for comment late Wednesday afternoon.