• Kmart is the third largest retailer in the nation operating over 1,416 discount merchandise stores that sell a range of products, from house wares to groceries.
•In 2002 Kmart filed for Chapter 11 bankruptcy protection.
• Kmart executives settled fraud charges filed by the SEC for overstating earnings.
• The National Labor Committee and Sweatshop Watch both allege that Kmart sources from sweatshops.
• Visit Go Green and support sustainable local economic development.
-- Profile Updated 07/08/2010
Kmart operates over 1,416 discount merchandise stores that sell a range of products, from the company's Martha Stewart brand of housewares to groceries. Headquartered in Illinois, the company reported sales of $19.1 billion and employed 133,000 people in 2006. In January 2002, Kmart declared Chapter 11 bankruptcy and announced plans to close 13 percent of its stores. On March 24, 2005 Kmart completed its merger with Sears Roebuck for $12.3 billion, creating the third largest retail store in the United States. Both companies are now under the parent company Sears Holdings Corporation.
Be Safe PVC
The Center for Health, Environment and Justice (CHEJ) and a growing network of organizations are launching PVC consumer campaigns to encourage major corporations to phase out their use of PVC and to support policies that phase out PVC…
The Center for Health, Environment and Justice (CHEJ) and a growing network of organizations are launching PVC consumer campaigns to encourage major corporations to phase out their use of PVC and to support policies that phase out PVC. They have already convinced Microsoft, Johnson & Johnson, Victoria’s Secret, and Bath and Body Works to phase out their use of PVC in their packaging! They want to leverage these victories to build momentum for further commitments to safer products in the years to come.
BlueLight.com LLC - San Francisco, CA
- Kmart Corporation - Troy, MI
- Kmart Far East Ltd. - Hong Kong, Hong Kong
Kmart Far East Ltd. - Hong Kong, Hong Kong
- Kmart Overseas Corporation - Las Vegas, NV
- Kmart Pharmacies Inc. - Troy, MI
- Sears, Roebuck & Co.
Hoffman Estates, IL 60179 USA
Kmart fined for lying about products being biodegradable. The company has agreed to stop making false claims that their products are biodegradable.
-- Environmental Leader, 06/10/2009
Kmart received a “D” on Co-op America’s Retailer Scorecard for supporting merchants that use sweatshop labor. Kmart purchased merchandise from four out of nine known sweatshops with poor labor and human rights records.
-- Co-op America, 06/19/2007
The National Labor Committee’s May 2006 report titled, “US-Jordan Free Trade Agreement Descends into Human Trafficking & Involuntary Servitude,” documents violations of workers’ rights in numerous Jordanian factories. Factories included Al Shahaed Apparel & Textile and Honorway Jordan Ltd., both of which sow for K-Mart’s discount brand names. The lack of respect for workers’ basic human rights includes:
- Human trafficking and involuntary servitude of guest workers
- Confiscation of workers’ passports and denial of legally required identification cards
- Routine work shifts of 15 to 16 hours. More commonly, workers were forced to work through 38, 48, and even 72 hour shifts at Al Shahaed Apparel & Textile
- No sick days, paid vacations, or government holidays allowed
- Wages below the legal minimum
- Sporadic pay
- Inadequate and unsanitary working conditions
- Reports of sexual abuse and rape
- Workers subject to pay reductions, humilitation, violence, and threats if production goals not met
Khokon Shaikh, who was forcibly returned to Bangladesh after working for Honorway Jordan Ltd, stated: “If you want to work here you have to accept [current working conditions], otherwise go back to Bangladesh.”
-- National Labor Committee, 05/01/2006
Source URL: www.nlcnet.org/article.php?id=10
In December 2003, the nonprofit Human Rights Watch reported that US retailers J.C. Penney, Wal-Mart, and Kmart did business with the Confecciones Ninos factory before it closed in March 2002. Workers at the plant reported being denied overtime wages, drinking water, bathroom visits, and sick days, in addition to being threatened with termination for union activity,
-- Human Rights Watch, 12/04/2003
Source URL: hrw.org/english/docs/2003/12/04/elsalv6557.htm
According to Sweatshop Watch, workers at the Tarrant Mexico Ajalpan factory have been subjected to substandard labor conditions, including a minimum workday of 10 hours, verbal and sexual harassment, and pressure to meet unattainable production quotas. Failure to meet set quotas is punished with reductions to already meager salaries of between $40 and $70 dollars per week. Workers at the garment factory have succeeded in forming an independent union, however abuses continue. Kmart is one of many prominent retailers that continue to purchase denim clothing from Tarrant, despite such reports.
-- Sweatshop Watch, 11/01/2003
In August 2001, federal authorities shut down a San Francisco garment plant that produced clothing for Kmart saying that it operated without a license and owed workers more than $850,000. Owners of the Wins garment factory denied the charges saying "The workers knew the company had problems. So they held on to their checks to help the company until the company could turn around." However, federal officials stated that the owners made $1.2 million from another business operation during the same time period.
-- State of California, 08/18/2001
Source URL: www.labor.ca.gov/caworks4ut1.htm
Ethics and Governance
In December 2004, federal regulators filed civil fraud charges against three former Kmart executives and five current and former managers of well-known vendor companies saying they engineered a $24-million accounting fraud that inflated earnings in the fourth quarter of 2001.
The Securities and Exchange Commission said Kmart had inflated earnings by improperly booking millions of dollars of payments from the vendors -- Eastman Kodak Co., Coca-Cola Enterprises Inc. and PepsiCo Inc. and its Frito-Lay division. Former Kmart divisional vice presidents Michael Frank and Albert Abbood neither admitted nor denied the allegations according to the SEC complaint. However, Frank agreed to be barred from serving as an officer or director of a public company for five years, and Abbood agreed to a $50,000 fine, the SEC said. An attorney for a third Kmart executive, John Paul Orr, stated, "We're not settling. We believe that the complaint is factually unsound." Neither Kmart nor the vendor companies have been charged by civil or criminal authorities.
The SEC reached settlements with seven of the defendants, but the court dismissed the case against the eighth.
-- CFO Magazine, 03/02/2007
Source URL: www.cfo.com/article.cfm/8796308?f=search
In June 2006, the U.S. District Court judge approved an agreement which grants 125,000 employees and retirees $11.75 million to settle the lawsuit against former Kmart chief Charles Conaway and other former executives. In 2002, Kmart employees filed a lawsuit after losing more than $100 million in benefits, shortly after Kmart declared bankruptcy. The lawsuit claimed that company officials failed to “exercise proper care” for their pension money.
-- U.S. District Court, 06/30/2006
Kmart achieved a score of 43 out of 100 on the Human Rights Campaign 2005 Corporate Equality Index which rates large corporations on policies that affect their gay, lesbian, bisexual and transgender employees, consumers and investors.
-- Human Rights Campaign, 09/20/2005
Source URL: www.hrc.org
The Kmart Creditor Trust filed a lawsuit against six former Kmart executives for fraud and abuse of company finances costing the corporation a total of $1 billion. Creditors claim that the executives implicated wrongfully spent Kmart funds for private expenses such as luxury cars, chauffeurs, and superfluous home improvements. Irresponsible spending abounded even as the company prepared to announce bankruptcy. Creditors also filed charges against former executives who received loans just weeks before the company formally filed bankruptcy.
A judge ruled in 2005 that the executives were not guilty of fraud.
-- Detroit News, 08/15/2005
In 2004 Kmart paid $60,000 to settle charges by the U.S. Equal Employment Opportunity Commission alleging the company violated the Americans with Disabilities Act by refusing to hire a man because of his mental disability. Edward Jones, 35, is mildly mentally retarded but qualified to perform the duties of stocker, the EEOC suit said. The lawsuit claimed that he scored higher on Kmart's pre-employment questionnaire than applicants later hired for the job.
-- Oakland Press, 03/13/2004
Health and Safety
From vinyl shower curtains to children’s toys, PVC (polyvinyl chloride) plastic products pervade our homes and lives. These products are dangerous to our health and environment from start to finish - in the factory, at home, and in the trash, releasing toxic chemicals linked to cancer and birth defects. The good news is safe and cost-effective alternatives exist and retailers such as Ikea have completely phased out PVC.
The following products made by Martha Stewart Everyday and Essential Home (both produced by and for Kmart) contain PVC plastic in the actual products and/or packaging:
- Essential Home oblung vinyl tablecloth
- Essential Home round vinyl tablecloth
- Essential Home square vinyl tablecloth
- Essential Home vinyl shower curtain liner - 20 different varieties identified
- Essential Home vinyl shower curtain – annabella
- Essential Home vinyl shower curtain – cozumel
- Essential Home vinyl shower curtain – jump
- Essential Home vinyl shower curtain - mosaic squares
- Essential Home vinyl shower curtain – twinkle
-- Center for Health, Environment and Justice (CHEJ), 07/18/2006
Source URL: www.besafenet.com/pvc/pvccompanies.htm
In 2003, Federated Department Stores, Kmart and JC Penney were among the list of retailers implicated for selling costume jewelry containing unsafe levels of lead. The Center for Environmental Health selected hundreds of pieces of costume jewelry to undergo safety testing, and more than one-third of the items chosen had concentrations of lead that could pose a significant health risk to children and adults alike.
-- Center for Environmental Health, 01/27/2006
Source URL: www.cehca.org/jewelry.htm
The Kmart Corporation was fined $110,000 by the U.S. EPA following inspections of a line of the company’s home garden products in 2004. Kmart marketed a line of garden hoses as having the capacity to prevent the growth of mold, fungus and bacteria. Upon investigation the EPA found that the garden hoses contained unregistered pesticides, of which the EPA could not verify the effectiveness or safety. EPA sought a fine of $110,000 in response to the complaint against the company, following April 2004 EPA inspections of Kmart stores in Linden and New Brunswick, New Jersey.
-- Environmental Protection Agency, 10/26/2004
Ethics and Governance
According to the Philadelphia Daily News, the U.S. Equal Opportunity Employment Commission sued the Kmart Corporation on September 22, 2005 for failing to look into a sexual assault case involving a store supervisor and a teenaged female employee. The supervisor of a Norristown, PA store allegedly fondled and sodomized a 16-year old worker, and was removed from store premises by local police. The supervisor was released and no action was taken against him on behalf of Kmart. Within two months of the first incident, another teenage girl working as a cashier claimed to have been assaulted by the same man. The Kmart Corporation again failed to address the claims and is now the subject of a lawsuit for “malicious and reckless conduct.”
-- Philadelphia Daily News, 09/23/2005
Source URL: none available
Rainforest Relief recently achieved success on its campaign to stop Kmart’s sale of outdoor furniture made from Nyatoh wood. Nyatoh comes from the rainforests of Indonesia and Malaysia, and is a tropical hardwood that contributes to the ecological diversity of the endangered rainforests of Southeast Asia. Rainforest Relief’s public campaign convinced Kmart to discontinue the distribution of Nyatoh outdoor furniture. Sears, however, which is now a corporate entity under Kmart ownership, has made no such commitment and has not responded to Rainforest Relief’s campaign.
-- Rainforest Relief, 09/14/2005
Costco, T.J. Maxx (part of TJX) and Kmart failed to respond to requests by Amnesty International (AI) and Global Witness for information on the companies' diamond sourcing policies. In accordance with the Kimberley Process Certification Scheme which seeks to end the trade of conflict diamonds, retailers made an industry-wide commitment to educating employees on company diamond purchasing regulations. However, upon administering an industry survey, AI and Global Witness found that only 42% of retail staff were aware of any company guidelines for sourcing diamonds.
-- Amnesty International, 10/18/2004
Ethics and Governance
In 2002 BusinessWeek named Kmart as having one of the worst corporate boards. The company was cited for multiple investigations of its accounting practices, a $501 million profit restatement, and a federal grand jury probe into pay practices. The magazine also noted the board's passivity as the company's performance deteriorated into a bankruptcy filing in January, while it approved $28 million in retention loans to 25 top executives.
-- Business Week, 10/07/2002
Source URL: none available