Welcome back to the Deep Dive. Today, we aren't
just looking at a business case study. I think
it's fair to say we are performing a full -scale
autopsy on a giant. A giant that for a very,
very long time felt... Well, it felt immortal,
didn't it? It really did. OK, so let's just unpack
this for a second. I want you to look at the
date on your phone or your calendar, whatever
you use. It is February 14th, 2026. Valentine's
Day. Exactly. Valentine's Day. Now, I want you
to imagine it's Valentine's Day back in, say,
1994. You need to grab a last minute box of chocolates,
maybe a cheesy card. maybe a blender because
you're a practical romantic, I don't know. You
had a really, really easy option. You could just
drive to one of the nearly two and a half thousand
locations of a specific retailer. A retailer
that was at that exact moment, one of the largest
corporate entities on the entire planet. We are
talking a force about Kmart. And I think the
scale of Kmart in 1994 is, it's actually hard
to overstate. Oh, completely. They operated 2
,486 stores globally. They were the original
category killer. They really defined the whole
concept of the discount department store long
before Sam Walton was a household name. And that
right there, that is the hook for today's mystery.
Because here we are in February 2026, and that
empire has, it's completely evaporated. Vanished.
And I don't just mean it's struggling or downsizing.
I mean, for all intents and purposes, it is gone.
It's a vanishing act of historical proportions.
If you pull up a map. of the mainland United
States right now, today, and you search for a
Kmart, you will find exactly one pin on that
map. One, just one, in the entire lower 48 states.
And even that one, which is down in Miami, Florida,
I mean, it's barely a Kmart. It has an asterisk
next to its name the size of a billboard, which
I'm sure we'll get to later. Oh, we will. But
aside from that one, that single anomaly. The
brand has been just wiped off the continent.
You literally have to get on a plane and fly
to Guam or the U .S. Virgin Islands just to see
that big red K on a storefront. So the mission
for this deep dive is to answer the question,
how? How does that happen? We have a massive
stack of sources in front of us. We've got corporate
history records going all the way back to 1899.
We have bankruptcy filings that. I'm not kidding.
Read like a Shakespearean tragedy. Right. Store
closure timelines, operational reports. We need
to figure out how a company that had such a massive
head start on Walmart, a company that was a cultural
icon with the blue light special, how it managed
to collapse so completely. It's really a story
about the tension between innovation and stagnation.
It's about an identity crisis that spanned decades.
It's also about a disastrous merger that. I think
I remember one financial analyst at the time
described it as two drowning people trying to
save each other by grabbing onto each other.
That's a perfect description. And crucially,
it's about specific, almost granular strategic
failures. Failures with technology, with supply
chains, things that sealed their fate 20 years
before the end was even in sight. Well, let's
start at the foundation then, because I think
there's this common assumption that Kmart just
sort of popped up fully formed in the suburbs
in the 1970s. But the roots go way, way back,
don't they? Much, much further back. To understand
the fall, you really have to respect the rise.
And the story starts in the late 19th century.
We're talking about a man named Sebastian Sparing
Krez. S .S. Krez. It sounds like the name of
a ship, like a big steamliner. And he was a force
of nature in a way. He was a traveling salesman
originally. And get this, he actually sold tinware.
to Frank Winfield Woolworth. Wait, wait. As in
the Woolworth? The guy who basically invented
the five and dime store. The very same. Yeah.
Kredge was selling to the pioneer who invented
the entire category. So he saw firsthand what
Woolworth was doing, this model of high volume,
low prices. And he thought, you know, I want
a piece of that action. So he learned from the
master. He did. So in 1897, Kredge takes $6 ,700,
which was his entire life savings from being
on the road, and he invests it into a store in
Memphis, Tennessee with a partner. Wow. $6 ,700.
And by 1899, he's traded his share in that store
for full ownership of a store in Detroit. And
that Detroit store. That is really the true beginning
of the S .S. Kresch company. And just to be clear,
this wasn't a Kmart yet. This was a classic variety
store. Exactly. It was a five and dime. The whole
gimmick was the price point. Everything was cheap,
five or ten cents. In fact, during World War
I, when inflation was really hitting hard, Kresch
experimented with raising the price limit in
his stores all the way up to one dollar. And
that was seen as like a huge innovation at the
time. A massive deal. But the company was a monster
success. By 1912, they incorporated with 85 stores.
By 1924, Kredge himself was worth about $375
million. Which is what in today's money? Billions.
Billions and billions. They survived the Great
Depression. They survived two world wars. They
were a blue chip staple of the American economy.
But the pivot, the moment that really, really
matters for our deep dive. that comes after World
War II, the entire world changed and where people
lived changed. Exactly right. The great migration
to the suburbs. In the late 40s and 50s, the
Kretsch executives, they were looking at the
data. People were leaving the crowded city centers
where all the Kretsch variety stores were. They
were moving out to places like Levittown, these
sprawling new communities. Right. And shopping
patterns were shifting. It went from walking
to the corner store to driving the family car
to the new shopping center. And there was an
executive at Kredge named Harry Cunningham who
saw the writing on the wall. He knew they had
to change. Cunningham is really the father of
the modern Kmart, isn't he? He's the visionary
in this part of the story. He absolutely is.
In 1961, Cunningham went on what you could call
a reconnaissance mission. He toured a store called
Ann and Hope. in Rhode Island. And in Hope. I've
never even heard of that. Most people today haven't.
But they were the true pioneers of the discount
department store model. Centralized checkouts,
shopping carts, self -service. All the things
we take for granted now, they were doing it first.
Okay, so Cunningham goes there to take notes.
He does. And here's where we get one of the great
historical coincidences. One of the great what
-ifs of retail history. Go on. In that same year,
1961, A guy from Arkansas named Sam Walton, the
founder of Walmart, also visited that exact same
Anne and Hope store in Rhode Island. No way.
At the same time. Roughly the same time. They
were both walking the aisles of the same store,
taking notes on the same business model. They
were literally drinking from the same well of
inspiration. That is just wild. That's a movie
scene. It is. But here's the crucial difference.
Cunningham had the massive resources of the S
.S. Crush company behind him. He didn't have
to scrape for loans and mortgage his house like
Sam Walton did. Krez had the capital to move
fast. And they moved very fast. On January 25,
1962, the S .S. Kredge Company opened the very
first store that had the name Kmart on it. It
was in San Fernando, California. Now, was that
the big 80 ,000 square foot box store that we
all remember? Actually, no. And this is an interesting
little footnote. Kredge called it a Bantam Kmart.
It was smaller, only about 27 ,000 square feet.
It was actually supposed to be a traditional
Kredge store until very late in the planning
process when they decided to test out the new
branding. So it was like a prototype. A proof
of concept. But just a few months later, on March
1st, 1962, they opened the first ground -up,
full -sized, purpose -built Kmart in Garden City,
Michigan. How big was that one? 80 ,000 square
feet. This was the real deal. This was the template
for the thousands of stores that would follow.
And that year, 1962... We have to talk about
that year. It keeps coming up in business textbooks
for a very good reason. It's what people call
the class of 62. It's incredible. In that single
year, you had the founding of Kmart, the founding
of Walmart, and the founding of Target. All three
retail giants launched within months of each
other. But Kmart was the big brother in that
class, right? They were the ones with the advantage.
Oh, absolutely. Kmart was the rich kid on the
block. They had the capital. They had the existing
supply lines. They had the real estate expertise
from the Krezh empire. They opened 17 more stores
just in 1962 alone. And Walmart at that point
was just a handful of stores in Arkansas? A tiny
speck in Arkansas by comparison. Kmart had this
huge head start. And by 1977, the business was
so dominant that the company officially changed
its name from S .S. Krezh Co. to Kmart Corporation.
They were the force. They were the ones putting
everyone else out of business. And that dominance,
that brings us right into the golden era. The
time when Kmart wasn't just a store, it was a
cultural phenomenon. We have to talk about the
blue light. We have to. The blue light special.
It was introduced in 1965, and it is arguably
one of the most famous, most effective marketing
tactics in the entire history of retail. Okay,
so for our younger listeners who might strictly
be online shoppers who've never experienced this,
paint the picture for us. How did this actually
work physically inside the store? It was so brilliantly
low tech, but psychologically. It was genius.
A store employee would literally wheel a cart,
like a tall metal stand on wheels, with a rotating
blue police -style light on top. Just a regular
plug -in light? Yep. They'd wheel it to a specific
aisle, plug it into an outlet, and the light
would start spinning. And then a voice would
come over the store's PA system, and it always
started the same way. Attention, Kmart shoppers.
Chills. I can still hear that voice. Yeah. And
it was a flash sale, right? A flash sale. For
the next 15 minutes only, in aisle four, men's
tube socks are 50 % off. Or motor oil. Or blenders.
Or whatever it was. So it started as just a way
to get rid of inventory they had too much of.
That was the original idea. It was a mechanism
to clear out slow -moving merchandise. If you
had way too much stock of something, you just
flash the blue light on it and clear the shelf.
But it became so much more than that. It became
a pop culture touchstone. It created this sense
of urgency. an event happening it totally did
it gamified shopping before gamification was
even a buzzword you might be on the other side
of the store but you'd hear that announcement
and you would literally run over just to see
what was happening you didn't want to miss out
it was a classic impulse by a driver exactly
it created a collective experience in the store
everyone would converge on that blue light It
was like a little party in aisle seven. It worked
so, so well that Kmart used it aggressively for
nearly 30 years. It was their signature. And
that marketing engine, it just fueled this incredible,
relentless growth. Throughout the 70s, Kmart
was just ruthless. They were the apex predator
of discount retail. They put a ton of regional
competitors out of business. Chains like Zare,
Ames, Hills. Kmart just rolled into town and
crushed them. And the numbers just kept climbing.
Oh, yeah. By 1981, they opened their 2000th store.
And by 1990, they were the second largest retailer
in the United States, second only to Sears. Which
is so ironic considering what happens later in
the story. But here, right here at their peak,
this is where the cracks really start to form.
In the 80s and 90s, while they were sitting on
top of the world, Kmart completely lost focus.
They absolutely did. They fell into what I call
the diversification trap. Instead of pouring
all their resources, all their brainpower into
making the Kmart stores better, cleaner, and
more efficient, the leadership, they kind of
got bored with just selling discounted goods.
They wanted to build an empire of brands. They
went on a shopping spree. A massive one. It's
almost hard to believe the list of companies
they bought. They bought the bookstore chain
Walden Books. Okay, I remember that. Then they
bought Borders and merged them. They bought a
home improvement chain called Builder's Square
to compete with Home Depot. Right, Builder's
Square. They bought Sports Authority in 1990.
They bought Payless Drugs in 1985. They bought
OfficeMax in 1991. I think they owned OfficeMax,
too. I had no idea. It's like they were trying
to be everything to everyone all at once. They
were building a conglomerate. And the major consequence
of that was that the corporate focus. the attention
of the C -suite. It shifted away from the core
business. While the top executives were busy
figuring out how to manage a bookstore chain
and a sporting goods chain, the actual Kmart
stores, the engine of their profit, started to
suffer from serious neglect. And meanwhile, down
in Arkansas, Sam Walton is doing the exact opposite.
He isn't buying bookstores. No, he's obsessing
over one thing and one thing only, supply chains.
And that brings us to part three, the stumble.
The 1990s are really where the war was lost,
even if the company managed to survive for another
30 years. And it starts with a huge psychological
blow. It does. In November 1990, Walmart officially
surpassed Kmart in size to become the number
one retailer in America. That must have been
a massive shock to the ego in Troy, Michigan
at Kmart headquarters. It had to be. But the
reasons for it were structural and they were
technological. This is the part of the story
that isn't as sexy as the blue light special,
but it is the absolute core reason why Kmart
died and Walmart lived. It all comes down to
data. Explain that. How did data, or a lack of
it, kill Kmart? Well, starting in the late 80s,
Walmart and Target invested billions with a B.
into computer systems, into barcodes, into satellite
tracking for their truck fleets. They built this
incredible high -tech system where they knew
exactly what was on every single shelf in every
single store in real time. So if a tube of toothpaste
sold in Kansas at 2 .0 p .m. The central warehouse
knew about it instantly, and a replacement was
already queued up to be shipped that night. It
was called just -in -time inventory. It was revolutionary.
Okay, so that's Walmart. What was Kmart doing?
Kmart did not invest. It's as simple as that.
The board prioritized paying high dividends to
their shareholders. They took the short -term
profit, the easy money, over the long -term expensive
and difficult infrastructure investment. So what
did that mean in practice? Their supply chain
was just old. It was antiquated. This meant they
often had shelves that were either empty of the
stuff people actually wanted to buy or they were
overflowing with stuff that nobody wanted. Their
distribution costs were higher. They couldn't
compete with Walmart on price because their whole
back -end system was so inefficient. So while
Walmart is becoming this finely tuned, data -driven
machine, Kmart is essentially flying blind. That's
a great way to put it. And because they were
losing ground, they started to have this massive
identity crisis. They kept trying to rebrand,
just hoping a new coat of paint would somehow
fix the rotting foundation. Oh, I remember this
era so well. The logo just kept changing, didn't
it? It was constant. In 1990, they ditched that
classic turquoise italic K and went to the big
red block letter K with the word March written
inside it. And one we all know. Right. But then
they started messing with the store formats.
They launched the Super Kmart Center in 1991.
That was their big attempt to compete directly
with Walmart super centers. They added full grocery
stores, bakeries, delis, seafood counters, the
works. I remember the Super Kmarts. They were
absolutely huge, cavernous. They were massive.
But then, just a few years later, they pivoted
again. In 1997, they launched a new concept called
Big Kmart. Okay, Big Kmart. What was the difference,
really? It sounds almost the same. Well, Big
Kmart was supposed to be brighter with wider
aisles. The focus was more on home fashion and
children's apparel, and they had a big consumable
section called the pantry. By the year 2000,
they had converted something like 1 ,900 of their
stores to the big Kmart format. It just feels
like flailing. It feels desperate. Like maybe
if we call it big, people will come back. It
was absolutely flailing. They even had another
really short -lived concept in 1995 called Today's
Kmart. They were just trying to find a format.
any format that would stick, but they weren't
fixing the underlying issue, which was that the
stores were often getting dirty, the inventory
was completely unreliable, and the customer service
was lagging way behind Walmart and Target. You
can change the sign out front as many times as
you want, but if the floor is dirty and the shelves
are empty, the customer's not coming back. And
all of this, this downward spiral, it leads directly
to the first big crash. It does. January 22,
2002. Kmart files for Chapter 11 bankruptcy.
At the time, it was the largest retail bankruptcy
in American history. And this wasn't just a,
well, we had a few bad sales quarters kind of
bankruptcy. There was a lot of scandal involved
with this one. Oh, yes. The leadership at the
time, the chairman, a guy named Chuck Conaway,
and the president, Mark Schwartz, they faced
some very serious accusations. Like what? They
were accused of deliberately misleading shareholders
about the company's financial crisis. And optics
were just... They were terrible. There were all
these reports coming out that they were spending
company money on private airplanes, on expensive
houses, on boats, all while the ship was literally
sinking beneath them. That is the absolute classic
corporate villain story right there. It is. And
the fallout from the bankruptcy was just brutal.
They closed over 300 stores almost immediately.
They pulled out of the entire state of Alaska.
34 ,000 workers lost their jobs. A huge number.
And... In a move that was just so symbolic of
their confusion, they officially discontinued
the blue light special. They tried to modernize
by killing the one unique beloved thing that
made them famous in the first place. So they
emerge from bankruptcy, but everything is different
now. The company is vulnerable. And this is where
a new player enters the game. This is where Eddie
Lampert comes in. This is part four. The merger
in the Lampert era. And this is probably the
most controversial, most debated chapter in the
entire history of modern retail. So what happened?
While Kmart was in bankruptcy, a hedge fund called
ESL Investments, which was run by Edward Lampert,
started buying up a huge chunk of Kmart's corporate
debt for pennies on the dollar. So he wasn't
buying stock. He was buying the debt. He was
becoming their biggest creditor. Exactly. Which
gave him control. When Kmart emerged from bankruptcy,
he became the new chairman. And Lampert had a
very, very specific philosophy. He was a hedge
fund guy, not a merchant. He didn't grow up stocking
shells like Sam Walton or Harry Cunningham. He's
a numbers guy. A pure numbers guy. His view was,
and this is a direct quote, sales without profit
do not allow a business to be successful. Which,
I mean, that sounds perfectly logical on paper.
You don't want to lose money on sales. It does
sound logical. But in the world of retail, sometimes
you need to spend money to make money. You have
to renovate stores. You have to run big ad campaigns.
You have to drive traffic, even if the margins
on some items are thin, because that traffic
buys other, more profitable things. Lampert prioritized
the balance sheet above all else. He cut costs.
Ruthlessly. He didn't want to spend a dime on
renovating stores if the ROI wasn't guaranteed
almost immediately. Many analysts at the time
and since would argue that he was stripping the
assets. He was treating the company more like
a real estate portfolio than an actual living,
breathing retailer. That's the argument. And
then he made the move that just shocked the entire
financial world. The Sears merger. In 2004, Kmart,
this company that had just clawed its way out
of a massive bankruptcy, announced it was purchasing
Sears. For $11 billion. So let me get this straight.
A struggling, just out of bankruptcy Kmart buys
a struggling, slowly dying Sears. That's exactly
what happened. They call the new parent company
Sears Holdings Corporation. The idea supposedly
was to create this new hybrid retailer. They
thought they could cross -sell. They started
putting Sears' famous house brands like Kenmore
Appliances and Craftsman Tools into Kmart stores.
Oh, I remember seeing that. It was so weird.
You'd walk into a Kmart and there'd be this whole
wall of Craftsman lawnmowers right next to the
pantry section. It felt disjointed. It was a
very strange mix. But the reality was they just
merged two companies that both had the exact
same massive unsolved problems. Problems with
inventory, problems with the store experience,
and problems with brand. relevance in the 21st
century. And neither one had ever solved that
tech gap with Walmart and Target. Not even close.
So now you didn't have two sinking ships. You
just had one much bigger, much more complicated
sinking ship. And the decline from that point
on, which it wasn't a sudden crash. It was just
a slow, painful bleed. The slow bleed is the
perfect way to describe the period from, say,
2010 to 2018. It wasn't a sudden event. It was
a long, agonizing decay. Reports just kept coming
out about the terrible condition of the stores.
Oh, yeah. Ceiling tiles falling down, dirty floors,
disorganized shelves, roofs leaking. It became
a meme almost. The sad Kmart aesthetic became
a whole thing online. It did. There are whole
Internet communities dedicated to just photographing
the decay of these stores. Right. And then came
the data breaches, which made things even worse.
2014, there was malware in their payment systems.
Then in 2017, credit card information was exposed.
It just completely eroded any trust that was
left in the brand. And all the while, Lampert
just kept closing stores. It was liquidation
by attrition. Just round after round of closures.
2011, 2014, 2016, 2017. Every few months, you'd
see a new list of 100 stores that were closing.
And I remember reading something just incredible
about their advertising strategy, or lack thereof,
in 2017. Yes. This is one of the most telling
details. In the 2017 holiday season, the biggest,
most important shopping time of the year, the
time when every single retailer is screaming
for your attention, Kmart ran exactly zero television
ads. Zero. None. Not a single one. That just
feels like giving up. That feels like waving
the white flag. They claimed it was a pivot to
digital marketing. But to the average consumer,
it just looked like the brand had completely
ceased to exist. In 2018, the last Super Kmart
closed in Warren, Ohio. The whole grocery store
concept was officially dead. Which brings us,
inevitably, to the second bankruptcy. October
2018. Sears Holdings files for Chapter 11. The
Great Lampert experiment had officially failed
to turn the retailer around. But even then, Kmart
didn't disappear completely. Not right away.
No. In a controversial move, Lampert created
a new entity called TransformCo and basically
bought the remaining assets out of bankruptcy
himself to prevent a total liquidation. So he
sold the company to himself. Essentially. But
from 2019 onward, it was just an extinction event
in slow motion. We can literally track the timeline
of extinction by the key milestones. Walk us
through that timeline. It really is like watching
a species just go extinct. Okay, so 2019 saw
another massive wave of closures. That's the
year they pulled out of states like Arkansas,
Georgia, and Kansas entirely. The map was getting
emptier and emptier. Then 2021 was a big one,
wasn't it? A really symbolic blow. It was a gut
punch. In 2021, Kmart closed its last remaining
store in the state of Michigan. In Marshall,
Michigan. The home state, the state where it
all began. The birthplace. Closing the last store
in the state where S .S. Krigich started it all
over a century before. That same year, they closed
their last West Coast store in Grass Valley,
California. The entire western half of the country
was now a Kmart -free zone. And by 2022, it was
down to just a handful. Just four stores left
in the mainland U .S., three in New Jersey, and
the one in Florida. Why did New Jersey hold out
for so long? Any idea? That's a good question.
Probably a mix of factors. High population density,
maybe some older demographics who were loyal
shoppers, favorable long -term leases. But even
they couldn't hold on forever. Westwood, New
Jersey closed in 2023. And then there was the
Bridgehampton, New York store. That one was a
fascinating case study. It really was. It was
one of the last to go, closing on October 20.
2024. Why did that particular one survive for
so long? I mean, Bridge Hampton is in the Hamptons.
It's an extremely wealthy area. And that's exactly
why it survived. It was all about isolation.
The nearest Walmart or Target was a 45 -minute
drive away, sometimes longer with Hamptons traffic.
So it had a captive market. A completely captive
market. The locals, even the very wealthy ones,
still needed a place to buy basic household goods,
toilet paper, cleaning supplies, light bulbs,
without having to drive for an hour and a half
round trip. But even that perfect isolated environment
wasn't enough to save it in the end. And as the
mainland stores vanished, the islands started
to fall too. Right. The U .S. Virgin Islands,
which had been a stronghold for a long time,
the store in Sunny Isle on St. Croix closed on
July 5, 2025. Then the Lockhart Gardens store
on St. Thomas closed just a month later on August
16, 2025. So that brings us right back to today,
Valentine's Day 2026. Let's talk about what's
actually left. Let's talk about that mainland
anomaly down in Miami. This is truly the strangest,
most surreal part of the entire story. The last
Kmart in the mainland United States is in Miami,
Florida, in an area called Kendale Lakes. But
if you go there expecting to see a Kmart, you're
going to be very, very confused. Why? What is
it? Because it's not really a Kmart. The main
store space, the big 80 ,000 square foot box,
was leased out a few years ago to a home decor
chain called At Home. Okay, so where is the Kmart?
The Kmart now operates out of what used to be
the building's garden center. Wait, what? So
it's a tiny little store that's bolted onto the
side of another store? Exactly. It's about the
size of a CVS or a Walgreens. They sell a very
limited selection of pantry items, a few small
appliances, some cleaning supplies. It's a ghost
of a store. It's a placeholder. Why does it even
exist? Nobody knows for sure. It likely exists
just to satisfy some weird clause in a lease
agreement or maybe to hold on to the trademark
in the U .S. But it is Kmart in name only. It's
not a department store. That is profoundly sad
in a way. It is. But if you want to see a Kmart
that is still in its full glory, a thriving Kmart,
you have to get on a plane and go to Guam. Guam.
You called it the retail Galapagos. That is the
perfect term for it. Because the Kmart in Temening,
Guam, is an absolute beast. It opened in 1995,
and it is 170 ,000 square feet. It's one of the
largest Kmarts ever built. And it's still open.
Still doing well. As of 2026, yes. And for many,
many years, it was the single highest -grossing
Kmart in the entire world. We're talking sales
of around $100 million a year from one store.
Wow. Okay, so why Grom? What's the magic formula?
Why does it work there when it failed everywhere
else? Isolation. The same reason the Bridgehampton
store lasted so long, but on a much bigger scale.
Think about it. Amazon shipping to Guam. is incredibly
slow and expensive there is no nearby target
or walmart supercenter to undercut them on price
so it's the only game in town for a lot of things
yes it serves as the pantry for the entire island
but then there's a second really strange reason
for its success tourism Tourists? Who goes to
Kmart as a tourist? Asian tourists, specifically.
Tourists from Japan and South Korea, they visit
Guam, and they make a special trip to Kmart to
buy American snacks, cases of spam, chocolates,
things they can't get at home. For them, it's
a slice of Americana. It's a tourist destination.
It blows my mind. It's a totally unique retail
ecosystem where the modern predators, Amazon
and Walmart, they just can't reach it effectively.
And you said there's still one left in the U
.S. Virgin Islands, too. Yes. As of the 2025
closures, the location at the Tutu Park Mall
in St. Thomas is the last holdout in the Virgin
Islands. So the entire Kmart empire has been
reduced to a garden center in Miami and a few
heavily fortified island fortresses. That is
an incredible story. OK, before we wrap this
up, I want to hit part seven, the fascinating
footnotes, because in your research, you found
some really, really weird stuff. that kmart tried
over the years well they tried everything they
were desperate to innovate but often in the strangest
possible ways for instance did you know about
kmart chef kmart chef was that like a line of
cookware no it was a restaurant chain from 1967
to 1974 they ran a fast food chain in the parking
lots of kmart stores called kmart chef they served
hamburgers fries Hot dogs. It was their attempt
to be McDonald's. I had absolutely no idea. I
can't imagine telling someone, hey, let's go
out for a nice dinner at Kmart. And it gets weirder.
Then there was Kmart Dental. Stop it. You're
making that up. I am not. It was a prototype.
A dentist's office located inside a Miami Kmart
store. You could get your teeth cleaned and then
go buy a lawnmower in the same trip. That sounds
both terrifying and somehow convenient. Clean
up on aisle four and we have a root canal on
aisle five. And let's not forget blue light internet.
Oh, wait. I actually vaguely remember this one.
The blue CD -ROMs. That's the one. Launched in
1999. It was a dial -up internet service to compete
directly with AOL. They gave away free internet
access, or very cheap access, to try and get
people to shop on their website. And it actually
worked for a little while, didn't it? It was
surprisingly popular for a brief moment right
before the dot -com bottle burst. It showed that
they understood the internet was coming. They
just had absolutely no idea how to properly monetize
it or integrate it with their stores. It just
shows how much stuff they were throwing at the
wall, hoping something would stick. And, you
know, we should also mention their environmental
record, which... Wasn't great. They got hit with
some heavy EPA fines in 2007 for mishandling
hazardous waste. And there was a big scandal
in 2012, an investigation by Mercy for animals
regarding their pork suppliers and the use of
gestation crates. Did they do anything about
that? They did. To their credit, they pledged
to phase them out after the report came out.
But on the other side of that coin, they were
also huge philanthropists, right? Massive. We
can't overlook that part of their legacy. For
a very long time, they were the number one corporate
sponsor for the March of Dimes. They raised $114
million over 30 years. And they raised over $59
million for St. Jude's Children's Research Hospital.
They were a major part of the community fabric
in thousands of towns across America. And they
went racing. They did. If you watched IndyCar
or NASCAR in the 90s, the Kmart car was iconic,
sponsoring Newman Haas Racing. Michael Andretti
won a championship in a Kmart -sponsored car
in 1991. They sponsored Daryl Waltrip in NASCAR.
That red K was everywhere. So here we are, February
14, 2026. The autopsy is complete. When you put
it all together, what does this all mean? What's
the lesson here? If you look at that whole trajectory
from a $6 ,700 investment by SS Kredge to a global
retail powerhouse to this cautionary tale, I
think the lesson is painfully clear. No retailer
is too big to fail. It's the Titan problem. You
get so big, you become arrogant and you think
you can't fall. Exactly. And the failure to digitize
their supply chains in the 90s. that sealed their
fate. By the time Amazon became a dominant force,
Kmart was already dead. It just didn't know it
yet. They lost the war to Walmart in the 1990s,
not to Amazon in the 2010s. Stagnation is death,
especially in retail. Precisely. You have to
keep moving, you have to keep investing, or you
become a relic. So here's a final provocative
thought for you listening. The only places that
Kmart truly survives today, Guam, the USVI, are
places where geography itself creates a high
barrier to entry for their competitors. It's
all about isolation. So is isolation the only
protection left for the old way of doing retail?
Can a physical store only survive if the digital
giants literally can't reach its customers effectively?
It's a fascinating question and one worth asking
as we watch the entire retail landscape continue
to shift. change around us I want you to go home
and check your attics check your basements if
you have any old blue light merchandise or maybe
a Kmart receipt from 1994 tucked inside a book
hold on to it it's a relic of a fallen empire
thanks for listening to this deep dive we'll
see you next time