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HomeNewsLocal newsLabor Investigating Kmart Closure, Will Ensure Employee Rights, Molloy Says

Labor Investigating Kmart Closure, Will Ensure Employee Rights, Molloy Says

Some 75 people stand to lose their jobs with the closing of the Kmart store at the Sunshine Mall on St. Croix, according to the V.I. Labor Department.

Labor Commissioner Gary Molloy testifies before the Senate in May. (Photo courtesy V.I. Legislature)

Commissioner Gary Molloy said in a statement Thursday evening that his department has received official notice of the closure from Kmart parent company Transform KM LLC and has launched an investigation to ensure that the rights of all affected employees are fully protected.

“We are deeply concerned about the potential impact of the Kmart West closure on the affected individuals and their families. Our priority is to ensure their rights are upheld and they receive the support they need during this challenging time,” said Molloy.

The Labor Department’s investigation will ensure that all members’ rights under the territory’s labor laws and regulations — including the Virgin Islands Plant Closing Act, Title 24 Sections 471-478, and the Worker Adjustment and Training Notification Act of 1988 — are properly observed, according to the press release.

All affected employees are encouraged to familiarize themselves with their rights and contact the Labor Department for guidance and support throughout the process. “VIDOL stands ready to provide assistance, answer questions, and address concerns related to the closure and protections guaranteed by law,” the release stated.

For more information, individuals may contact the department’s Labor Relations Division at 340-773-1994.

Transformco, as the parent company is known, has not responded to requests for comment, including when the store will close, and whether its pharmacy will relocate to the Kmart in the Sunny Isle Shopping Center on St. Croix.

Retail consulting and asset acquisition firm SB360 Capital Partners first reported the closing on its website.

An employee who answered the phone at the store on Tuesday afternoon said “No comment” when asked to confirm the report and hung up the phone.

Kmart, its parent Kmart Holding Company, and Sears are all subsidiaries of Sears Holdings, which was formed when Kmart merged with Sears after buying out the company for a reported $11 billion in 2004. Sears Holdings subsequently declared bankruptcy in 2018.

Transformco was created in February 2019 to acquire some of the assets of Sears Holdings. Owned by Connecticut-based hedge fund ESL Investments, it has been steadily closing stores and only a handful of Kmarts now remain, including two on St. Thomas, now one on St. Croix, one in Guam, and two on the U.S. mainland.

Rumors have been circulating for years that the territory’s Kmarts are slated to close, and resurfaced as shoppers faced rows of empty shelves during the COVID-19 pandemic, when many retailers faced supply-chain issues.

In 2017, Sears Holdings announced its “substantial doubt” that Kmart would survive, but didn’t show much concern for the four stores in the U.S. Virgin Islands because they were not facing imminent closure.

In 2019, the company denied a rumor of imminent closure that was circulating. At that time, Kmart hinted that corporate executives were working on a new plan to enhance the prospects for the future success of the chain. That has yet to be seen. Within a year, the store had seemingly continued to dwindle, and rumors continued to circulate about the fate of the retail chain in the territory.

Once numbering more than 2,000 stores that were known for their trademark Blue Light Specials, Kmart was ubiquitous in the United States. Its downfall has been blamed on years of falling sales attributed to changing shopping habits and the rise of Walmart, Target and Amazon, according to a report by Fortune on the onetime retail giant that was founded in 1962.

Government House did not respond to phone calls seeking comment on the closure.

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