Substitute Walmart for Amazon, Chuck Conway for Eddie, and 244M loss for 685++.
NEW YORK (CNN/Money) - Kmart Corp. is delaying filing its financial report for the fiscal year that ended in January, and it warned Wednesday it may restate results.
The Troy, Mich.-based discount retailer, which filed for bankruptcy protection in January, said the delay in filing its 10-K annual report with the Securities and Exchange Commission will give its new management team time to complete an assessment of the company's accounting policies and methods.
The company's stock tumbled about 38 percent in 2001, in contrast with the Standard & Poor's Retail Index, which climbed about 36 percent in 2001. Shares of Kmart (KM: down $0.10 to $1.24, Research, Estimates) sank another 6 percent in early trading Wednesday following the announcement.
Kmart said it may restate results for last year due to a possible change in accounting methodology as well as a previously announced investigation concerning various accounting matters.
The restated results could include a loss "significantly higher" than the $244 million loss it reported for the fiscal year ended Jan. 31, the company said.
Kmart spokesman Jack Ferry said the accounting issues are related to an internal and SEC investigation into vendor contracts and general liability reserves.
Kmart, which was the nation's No. 3 retailer in terms of sales last year, succumbed to competition from Wal-Mart, the world's biggest company, and Target Corp., another discount chain.
Sloppy, poorly stocked stores, many of which were in need of renovation, drove consumers to other retailers, particularly Wal-Mart, which far outpaces the industry in everyday low prices, and Target, which grabbed a slightly more upscale niche with its high fashions at low prices, analysts have said.
Many on Wall Street blamed Kmart's ultimate fall in part on Chuck Conaway, the former CEO hired two years ago to turn the chain around and who tried going head-to-head with Wal-Mart on price, something no retailer has been able to do.