Kmart Posts 1st-Quarter Loss of $1.45 Billion

Kmart Corp. had a first-quarter loss of $1.45 billion as the ailing discount retailer slashed prices to clear out inventory and made payments to cancel leases on 283 closed stores.

The loss equaled $2.88 a share and swelled from $233 million, or 48 cents, a year earlier, Chief Financial Officer Al Koch said. Sales in the period ended May 1 fell 8.4% to $7.64 billion as the largest U.S. retailer to file for Chapter 11 bankruptcy lost more than $1 billion for the second straight quarter.

Kmart spent $1.02 billion to liquidate inventory and cancel leases at the stores. Profit and sales were hurt as Kmart couldn’t replenish its stores quickly enough after vendors, concerned about being paid, withheld shipments before the bankruptcy filing, investors said. Sales at stores open at least a year fell 8.8%.

Shares of Troy, Mich.-based Kmart rose 2 cents to 93 cents on the NYSE.