Kmart — The Blue Light Pioneer That Was Merged, Then Starved

Kmart was, for a generation, the default American discount store — the place with the flashing blue light and the disembodied voice announcing “Attention, Kmart shoppers” — and by 2022 it had been reduced from thousands of stores to a literal handful. The chain that bore the name was born in 1962, when the S.S. Kresge Company, a five-and-dime operator incorporated back in 1899, opened its first large-format Kmart discount store near Detroit. The format worked spectacularly. Kmart blanketed the country, peaked at roughly 2,400 stores with around 350,000 employees and some $37 billion in annual revenue by the mid-1990s, and for decades was the discounter most Americans pictured when they pictured a discounter.

Then, in the span of one career, two rivals founded the same year as Kmart’s first store — Walmart and Target, both 1962 — passed it and never looked back. Walmart out-priced it on every aisle with a leaner supply chain; Target out-styled it for the customer who wanted discount prices without the discount feel. Kmart, stuck in the indifferent middle, declared bankruptcy in January 2002, the largest retail Chapter 11 filing to that point. It emerged smaller, and then it made the decision that sealed its fate: in 2005, the hedge-fund manager Edward Lampert, who had taken Kmart out of bankruptcy, used it to acquire the equally ailing Sears for about $12 billion, fusing the two into Sears Holdings.

What followed was less a turnaround than a slow withholding. Under Lampert’s ESL Investments, the combined company was run as a portfolio of assets to monetize rather than a pair of store chains to rebuild; investment in the stores dried up, and Kmart’s locations aged into the dim, half-stocked places that became a punchline. Store counts fell every year. By the time Sears Holdings itself filed for bankruptcy in October 2018, Kmart was already a remnant. ESL bought what was left and ran it as Transformco, and the closures simply continued: four US Kmarts by early 2022, three by 2023, and the last full-size store on the American mainland — in Bridgehampton, New York — going dark in October 2024. The Blue Light Special outlasted nearly every store that ever flashed one.

Lord & Taylor — America’s Oldest Store, Sold to a Rental App

Lord & Taylor was the oldest department store in the United States, and in 2021 it closed every one of its stores after 195 years. Founded in 1826 by Samuel Lord and the English immigrant George Washington Taylor as a dry-goods shop on Catherine Street in Lower Manhattan, it predated Macy’s, Bloomingdale’s, and very nearly every other name that came to define American retail. For most of two centuries it traded on heritage and a particular kind of restrained, upscale taste — the Fifth Avenue flagship that opened in 1914, the rosewater-and-old-money associations, the place a certain New Yorker bought a good winter coat. By the 2000s it ran about 86 stores; by its final years it was down to 38.

The decline was the familiar department-store story — squeezed between the discounters below and the luxury houses above, and then hollowed out by e-commerce — but the ending was strange enough to be a parable about a particular moment in retail. In 2019, the Canadian conglomerate Hudson’s Bay, which had owned Lord & Taylor since 2008, sold the flagging chain to Le Tote, a San Francisco clothing-rental startup, for roughly $100 million. A retailer founded under James Monroe, in other words, was handed to an eight-year-old subscription app whose plan was to fuse a 200-year-old store with a Rent-the-Runway-style closet.

The plan never had time to fail on its merits. In March 2020 the pandemic closed the stores, and a chain whose specialty was dresses and dressy clothes watched demand for exactly that evaporate as the country switched to sweatpants. On August 2, 2020, Le Tote and Lord & Taylor filed for Chapter 11 together. Unable to find a buyer willing to keep the stores open, Lord & Taylor liquidated all 38 of them through 2020 and into 2021. The name did not die so much as detach from its body: the intellectual property was sold to the Saadia Group, which relaunched Lord & Taylor as an e-commerce-only brand, and it has since changed hands again. The stores, the 195 years, and the jobs were gone.