By Ross Markman and Tim Eberly
Amid the cosmetics, housewares and Martha Stewart products, a half dozen customers shopped the aisles of Kmart in Havre early this morning, most with the knowledge that the 2,100-store retail chain had officially filed for Chapter 11 bankruptcy protection earlier today.
Kmart, known to many by its BlueLight Special, will attempt to reorganize and restructure its debts, making it the largest retailer since 1990 to file for Chapter 11. Kmart Corp. said it does not expect to close any of its stores and hopes to emerge from bankruptcy in 2003.
Locally, shoppers such as Deanna Berg fear that losing the store would have far-reaching implications on the town's business community.
"I think it'd be tragic if we lost Kmart. People would have to go to Great Falls to shop, which would take away from our hometown. So many of our small businesses would suffer," said Berg, a lifelong Havre resident.
"It would definitely affect me a lot. I have two granddaughters. We spend a lot of time and money here," Berg added.
She isn't alone.
Mary Lybecker, an 11-year Havre resident, said she frequents Kmart at least once a week, mainly because she said the store offers good prices and selection.
"When you live here, you have to go to Great Falls for a lot of stuff," said Lybecker, carrying a purple basket and sifting through some Martha Stewart bath towels. "Kmart is such a big part of this town."
That's exactly why some local businesspeople don't foresee Havre losing its Kmart if the company decides to cut back on stores.
"I don't see (permanent closing) even as a remote possibility. They're very instrumental in the community," said Terry Schend, manager of Syntech.
Others, however, aren't as confident.
Paul Tuss, executive director of Bear Paw Development Corp., said the only thing Havre residents can do now is wait.
"I think the best thing we can do is monitor the situation and hope for the best, and, if necessary, prepare for the worst," Tuss said. "Obviously, it would be a severe blow to not just our local economy, but to the region, should the actions of the parent company trickle down in a way that would force the Havre store to close."
For the most part, employees at Havre's Kmart say they don't fear losing their jobs. Some of have worked at the store since it first opened on the east side of town a quarter century ago. The store moved to its current location in 1992.
Linda Malley, a sales associate for 25 years, said job security is not an issue and is confident the store will remain open.
"This is one of the top (moneymaking) stores in Montana," Malley said. "Still, it is scary. All we have here (besides Kmart) is Herberger's."
Cindy Turner, a 15-year Kmart employee, agreed.
"I think people here rely on our store a lot. They can get clothing and groceries and their prescriptions filled at a competitive price," Turner said while arranging items in a jewelry showcase. "I think a lot of people come out to Kmart to get everything they need at once."
Take Andrea Azure, for instance.
Along with her 1-year-old son, Noah, Azure browsed Kmart's aisles this morning, unaware that the company that owns the store she frequents two, sometimes three days a week, had just filed for bankruptcy.
"This is where I take my film and buy all my bathworks. I'm here all the time," Azure said when informed of the company's financial position. "This is the only place we really have to shop."
The lack of competition should help protect Havre store's future, according to Craig Erickson, planner for the Bear Paw Development Corp.
"It's the Kmart stores that are going head to head with the Target and Wal-Mart stores that are in trouble, and clearly that's not the case here in Havre," Erickson said. "We're hoping that the Kmart store in Havre will be spared."
And if it's not? Erickson said there are options, specifically the Denver-based Economic Development Administration, a 36-year-old agency under the U.S. Department of Commerce that provides funding for communities that have lost large numbers of jobs.
Erickson cited a time in the early 1990s when the Burlington Northern Santa Fe Railway closed its diesel shop. The EDA stepped in and provided Havre residents with financial assistance for sudden and economic distress. That money helped lessen the impact of the loss, Erickson said.
But, according to Debbie Vandeberg, executive director of the Havre Area Chamber of Commerce, no such help should be necessary in this situation. Vanderberg said Havre's Kmart is a profitable store and therefore should survive any aftershocks caused by the bankruptcy.
Corporate restructuring "is a very common practice in corporate America. Through restructuring, profitable stores or divisions survive and are given the opportunity to grow," Vandeberg said.
News like that is music to Kmart shoppers' ears. Especially Shirley Komis, a Chinook resident since 1952 who's been buying clothes, food and hardwares at the store since its inception.
"Oh, you bet it would have an affect. Where else in Havre would I shop?" Komis said, leaving the store, her cart filled with various odds and ends. "I do quite a bit of shopping here. I would miss it so much if it closed."