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The last K-Mart in Michigan

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Kresge Mansion, Detroit

Gusts of creative destruction, former retail giants edition:

Kmart is shuttering its last-remaining store in Michigan, the state where the once-proud retail chain launched in 1899. It’s one of series of store closings that will leave the company with only six locations in the continental United States still in business by year’s end.

Kmart is owned by Sears, which purchased the chain out of bankruptcy in 2005. There were 2,100 Kmart locations at the time of its 2002 bankruptcy filing, and 1,400 when it was purchased by Sears. The combined company, Sears Holdings, itself filed for bankruptcy in 2018, and although it survived that process, it has since been closing stores under both brands in what retail experts describe as a “slow-motion liquidation.”

“Obviously they are all going to be gone shortly,” said Mark Cohen, director of retail studies at Columbia University. “This movie has ended, and we’re watching the credits roll endlessly.”

Cohen said that there is no sense in rebranding the handful of remaining Kmart stores with the Sears name, as it would cost money to put up new signage, and the Sears brand would do little to attract more customers.

The last Michigan store is in Marshall, a suburb of Battle Creek, in the western part of the state.

Kmart started in the late 19th century when founder Sebastian Spering Kresge opened a five-and-dime store in downtown Detroit bearing his name. The Kmart brand didn’t come about until 1962. The chain grew rapidly for several decades, claiming the discount segment of the market that big box stores such as Walmart and Target now dominate.

Kmart became known for its 15-minute-long “blue light specials”: a store would flash a blue light and announce “attention Kmart shoppers” over the public address system, and customers would rush to buy the discounted goods. The promotions started in 1965 but were discontinued in 1991, although Kmart has tried to bring them back several times.

The Kmart.com store locator shows only 16 locations left in the continental United States. Six of them have already closed and another four, including the one in Michigan, will close soon, according to employees answering the phone at those locations.Sears has been going through its own steady string of store closings for more than a decade. Earlier this year, the chain closed its last department store in Illinois, where the company opened its first location in 1925.

A spokesperson for Transformco, the company created from the bankruptcy of Sears Holdings, did not respond to a request for comment on its closing plans.

There’s a glaring mistake at the top of this story: Sears didn’t buy K-Mart, K-Mart bought Sears for $11 billion in 2005, just three years after K-Mart filed for Chapter 11 bankruptcy protection. If you’re wondering how can go on an $11 billion shopping spree three years after you were asking the federal courts to allow you not to pay your creditors, you clearly do not have a mind for Business, unlike this guy.

Eddie Lampert is the hedge fund whiz kid who has been at the whirling center of the financial machinations via which K-Mart and Series, which together had about 3,400 stores in the USA when he combined them 16 years ago, are both going to cease to exist completely in the next few months. (If you read Lampert’s bio you’re going to run into names like Goldman Sachs, Robert Rubin, Steve Mnuchin, Yale, Skull and Bones, Martha’s Vineyard . . . I mean everybody know everybody on the West Side).

I don’t know anything about the economics of big box retail stores, so I have no idea why the two massive legacy brands of my youth are both about to join the corporate choir invisible, while Wal-Mart, Target, and Home Depot are thriving, even as Jeff Bezos has come to own 23% of the assets in the observable universe via the addictive seductions of cyber-shopping (you know me, I’m your friend, your main boy, thick and thin).

But anyway . . . I remember the distinctive smell of cheap plastic that was always the same in every K-Mart store, and of course the Blue Light Special (Ever notice how each Walgreens and Whole Foods etc, smells exactly like every other one? I wonder if some HBS alum decided that was a good idea back in the day or it’s all just a coincidence).

These Proustian ruminations are depressing me, so here’s a more uplifting story, which I found when I was annoyed by another mistake in the CNNBusiness story — the claim that Marshall, Michigan is a “suburb” of Battle Creek. It’s not: it’s a small town ten miles down the road from Cornflakes City, and it has pretty interesting history of its own. I bet somebody on this blog already knew that it lost out by one vote to Lansing in the legislative election to decide which town got to be the capital of the new state of Michigan (the town was so optimistic about its prospects that it even built a governor’s mansion in advance of the vote). I didn’t know that, nor I had I ever heard this story:

In 1843, Adam Crosswhite,[11] his wife Sarah and their four children ran away from Francis Giltner‘s plantation in Hunter’s BottomCarroll CountyKentucky because the Crosswhites learned that one of their four children was to be sold.[12] The Crosswhites made the tough journey north through Indiana with help from the underground railroad organization in Madison, Indiana. They finally settled in Marshall where they were accepted and Adam worked and built a cabin.[11]

In response to increasing numbers of runaway slaves, a coalition of slave owners in the north central counties and the Bluegrass region of Kentucky organized to recover the runaways. In January of 1846, Francis Giltner’s son David Giltner and three others went to Marshall to capture the Crosswhite family.[11]

On the morning of January 26, 1847, as the slave catchers and a local deputy sheriff were pounding on Adam’s door, his neighbors heard the noise and came running. The cry of “slave catchers!” was yelled through the streets of Marshall. Soon over 100 people surrounded the Crosswhite home.

Threats were shouted back and forth. One of the slave catchers began to demand that people in the crowd give him their names. They were proud to tell him and even told him the correct spelling. Each name was written down in a little book. Finally, the deputy sheriff, swayed by the crowd’s opinion, decided he should arrest the men from Kentucky instead. Marshall townspeople hid the Crosswhites in the attic of George Ingersoll’s mill. By the time the slave catchers could post bond and get out of jail, Isaac Jacobs, the hostler at the Marshall House, had hired a covered wagon and driven the Crosswhites to Jackson where they boarded a train to Detroit and then crossed over into Canada.[11]

Next the Giltners went to the federal court in Detroit. They sued the crowd from Marshall for damages in what is known in federal records as the Giltner v. Gorham case. Since Giltner had many of the names of members of the crowd it was easy to decide whom to sue. The Giltner v Gorham case resulted in two trials in federal court in Detroit, the first trial ending in a hung jury. At the conclusion of the second trial, the sole remaining defendant in the case, local banker Charles T. Gorham, was ordered to pay the value of the slaves plus court costs.[13] To curry political favor, Detroit entrepreneur Zachariah Chandler supposedly stepped in to pay these costs on Gorham’s behalf. [14]

Because of the Crosswhite Affair and many others like it, Sen. Henry Clay from Kentucky pushed a new law through Congress in 1850 known as the Fugitive Slave Law, which made it very risky for anyone to help an escaped slave.[15]

The Crosswhite family returned to Marshall after the Civil War. Adam Crosswhite is buried in Oakridge Cemetery in Marshall.[11]

There’s some Critical Race Theory to go with your cornflakes.

I realize this has been a rambling go-nowhere post, so let me end it with a random question: What author, living or dead, would be the most likely candidate to write a short story entitled “The Last K-Mart in Michigan.” I mean that title by itself brings me down faster than Tonight’s the Night at 2 AM.

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