Kmart closing oldest remaining Chattanooga store

Kmart closing oldest remaining Chattanooga store

July 10th, 2012 by Dave Flessner in Business Around the Region

James and Eula Harris talk about their experiences as patrons at the Kmart on Highway 58 on Monday afternoon. The store is closing its doors to customers, some of whom have been shopping there for nearly two decades. The store is the oldest Kmart in Chattanooga.

Photo by Jake Daniels/Times Free Press.

Kmart is closing its oldest remaining store in Chattanooga at the end of September.

Sears Holding Co., which said last year it will close up to 120 of its least profitable Sears and Kmart locations as part of a companywide cost reduction plan, is not renewing the lease on its 35-year-old Kmart store on Highway 58 in Harrison.

"The lease is up at this location and we're liquidating the merchandise (valued at $3.5 million)," said Kimberly Freely, director of communications for Sears.

The closing is among eight stores Kmart is closing in its latest round of cutbacks. Freely said the closings are cutting from 40 to 80 jobs at each store.

"I've been coming to this store for decades and I hate to see it close," David Tant, 55, said Monday after getting his monthly prescription filled at the Kmart pharmacy. "The people here are my friends, and that's what keeps me coming back."

Kmart hopes customers like Tant will switch to the Hixson Kmart three miles north in Hixson -- the only remaining Kmart in Hamilton County.

Kmart has closed other stores in East Ridge and on Signal Mountain Road over the past decade. But Kmart will continue to operate eight other stores within a 50-mile radius of Chattanooga, including locations in Hixson, Cleveland and Athens in Tennessee, Fort Oglethorpe, Dalton and Calhoun in Georgia and Fort Payne and Scottsboro in Alabama.

James and Eula Harris typically shop at the Harrison Kmart two or three times a week and were at the store Monday paying $126 to get some of their merchandise out of layaway.

"This was a shock to us because this store is very convenient and one of the only department stores in this whole area," Eula Harris said. "After Food Lion closed out here too, it means we've got to travel a lot further to go shopping."

Although Kmart shoppers in Harrison said they were disappointed their store soon will close, shoppers are flocking to the store in greater numbers this week to take advantage of a store-closing sale of up to 30 percent off on most merchandise -- and up to 70 percent off on some jewelry items.

"I hate that it's closing, but I did get some good prices today," Tajuna Sterling said Sunday when Kmart began its store liquidation.

Henry Luken, the owner of Luken Properties, bought the 117,525-square-foot Kmart shopping complex in 2001. He used 28,714 square feet of the complex to house his Covista Communications for most of the past decade. The space now houses a medical facility known as CKC.

Luken said Kmart wanted to extend its lease on the Highway 58 building for another five years at half the current $3 per square foot rate.

"The other space in this area rents for at least twice what Kmart now pays and I simply said no to cutting the rate in a way that would devalue the whole property," Luken said.

Luken said he will try to entice other retailers or other users into the space once Kmart moves out.

"I've already been approached about opening a flea market on the site," he said. "With the proximity of Volkswagen and other development, I think there is still substantial value in this property."

Contact Dave Flessner at dflessner@timesfreepress.com or at 757-6340