284 KMARTS TO SHUT MOORPARK, PALMDALE, WEST HILLS LOCATIONS ON HIT LIST.

Byline: Brent Hopkins Staff Writer

Kmart Corp. will shutter stores in Moorpark, Palmdale and West Hills as part of its attempt to reorganize, the bankrupt retailer announced Friday.

Confirming a flurry of rumors that have circulated in retail circles since Kmart's Chapter 11 filing Jan. 22, the local closures comprise part of a chainwide slicing that will darken 284 stores and eliminate more than 22,000 jobs.

The bankruptcy court must approve the closures and no timetable has been set.

By closing these ``underperforming'' stores, the Troy, Mich.-based chain hopes to immediately pump $550 million back into its bottom line, and an additional $45 million in following years.

The closures, said bankruptcy expert Jess Bressi, a partner with real estate law firm Cox, Castle & Nicholson's Irvine office, represent Kmart's weakest locations.

``They did a blue-light special of all the worst stores,'' Bressi said. ``These were the ones that were already closed or the ones they were hemorrhaging red ink on.''

The company still has stores in Burbank, North Hollywood, Northridge, Sunland, Thousand Oaks and Valencia.

Kmart sites are not likely to remain vacant for long, real estate industry experts said.

For example, three big retailers, department chain Kohl's Corp., home improvement chain Lowe's Co. Inc. and Wal-Mart Stores Inc. are said to be interested in the West Hills location.

Kohl's, a discount retailer whose fates have fared far better than Kmart's, has also frequently been cited as a possible replacement tenant for the Palmdale store. It could also fit in well to the retail mix at the revamped Fallbrook Center in West Hills, according to developer Jim Rosenfield.

``Every chance I get to replace an older, tired store with a new exciting store that's doing well, I'm thrilled,'' he said. ``I'm not delighted to hear about someone's difficulties ... (but) in the way I look at real estate, change creates opportunity. Certainly, that's a wonderful opportunity for a big-box retailer, and there are many of them who are trying to penetrate that market.''

With Target and Mervyn's anchoring the current space, and a Home Depot scheduled to be built by late next year, any of these additions would create an intensely competitive retail atmosphere. In spite of this, Rosenfield speculated that the property would still be an attractive target for the other chains.

``The difficulty to find good sites is so great, retailers will gladly go up against each other,'' he said. ``Wal-Mart's a great example, because they've tried to penetrate the L.A. market for 10 years, and look how few stores they have. This would definitely look good to them.''

Mark McGaughey, a first vice president for CB Richard Ellis, said the Palmdale location, at 10th Street and Marketplace Drive, would likely have many eager prospective tenants.

``It's only an opportunity to replace the tenant with another strong retailer,'' he said. ``That's a very well-located building, though, so there's a number of other candidates who'd like to go there, either as a main tenant or by dividing it up into a few smaller stores.''

In a statement released Friday, Kmart's chief executive, Charles Conway, described the closings as an integral part of the company's reorganization effort.

``We are confident that doing so will provide the company with a healthier, more productive store base,'' he said in the statement. ``While the business rationale supporting this action is compelling, we deeply regret the impact these store closings will have on our associates, our customers and the communities where these stores are located.''

While Kmart's rivals Target and Wal-Mart will absorb shoppers in most communities, Bressi characterized the local impact as the most devastating element of the announcement.

``If you look at it from a community perspective, think of the sales tax lost, the loss of jobs, and the big buildings that will sit empty for a long time,'' he said. ``At the pavement level, this is a bad situation. Right now, this is the worst time for this is to happen with the other big- box retailers that have filed bankruptcy.''

CAPTION(S):

photo, map

Photo:

(color) The Big Kmart in West Hills is on the bankrupt retailer's list of 284 poorly performing stores it plans to close.

Joe Binoya/Special to the Daily News

Map:

KMART CLOSURES

SOURCE: Kmart Corp

Jon Gerung/Staff Artist