Kmart in Marshall, Michigan, will be last store in state: Here's how it has survived

JC Reindl | Detroit Free Press

Show Caption Hide Caption Michigan will be down to just 1 Kmart store The Marshall store will soon be the last Kmart in the state.

MARSHALL — This small city in Calhoun County, about a 20-minute drive east from Battle Creek, will gain a new distinction in 2020: home to the very last Kmart store in Michigan.

The discount brand was born in Michigan in 1962, when Detroit-based retailer S.S. Kresge Co. opened the first Kmart big-box store in Garden City. At Kmart's peak, before the retail chain's Sears merger, double bankruptcies, shuttering of its Michigan headquarters and countless rounds of store closures, there were nearly 2,500 locations nationwide and 134 in Michigan.

Now there are three Kmarts in the state — in Warren, Waterford and Marshall. By February, only the store in Marshall, population 7,000, will remain. Garden City is long gone.

In parking lot interviews last week, the store's loyal shoppers noted how the Marshall Kmart is the only big-box retailer in the immediate area. Within city limits, its closest direct competitor is probably Dollar General. The local monopoly likely helped the Kmart survive.

“You have to drive all the way to Battle Creek for Walmart or Meijers," said Larry Lyvere, 29.

Local officials also attribute this lack of competitors to the unusual vibrancy and surviving old-time feel of Marshall's downtown, which has a 96% storefront occupancy rate.

“We don’t have any other big-box stores; they are all 15 to 20 minutes away," City Manager Tom Tarkiewicz said.

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Kmart officials won't comment about the Marshall store, or even say how many Kmarts are left globally. The busiest Kmart in the world is reportedly on the U.S. territory of Guam in the Pacific Ocean, where the 24-hour store is thousands of miles from any Walmart or Target.

The Marshall store, 15861 Michigan Ave., is situated in a shopping center at the edge of the city near I-69 along with a Family Fare supermarket, a Dollar Tree, a cash advance store and a Rite Aid. The complex is across from an Applebee's and up the road from Marshall Lanes bowling alley, a still-open Family Video and a classic "red roof" Pizza Hut.

The 90,000-square-foot store opened in the early 1990s as a "Big K," replacing an older and smaller Kmart that locals say once stood where the supermarket is.

“It is kind of the general store for Marshall in a lot of ways," said Scott Fleming, CEO of the Marshall Economic Development Alliance.

The store appeared brightly lit and clean on a recent Free Press visit, and the in-store restaurant, a Little Caesars pizza, was still open and serving customers. (Fun fact: Garden City is also home to the original Little Caesars location.)

Still, there were visible signs of a retail chain under stress, such as inventory gaps on store shelves, especially in the cooking ware and beverage aisles. The entire electronics section is gone, replaced with seasonal offerings such as Christmas stockings and wrapping paper.

More: Hear that? It's the sound of Kmart's glory days, saved from the trashcan

More: Which Kmarts are actually open, who still shops there?

In interviews, several shoppers said that in addition to the local convenience of the store, they appreciate the location's year-round layaway. That service is not offered by Walmart, which only does layaway for the Christmas season.

Shoppers also noted how the Kmart recently began selling beds, which it had not done before, and how it stocks large clothing sizes that can otherwise be hard to find without shopping online.

Sylvia Flowers, 67, of Kalamazoo said she was glad to find a selection of 36-inch curtains at the store.

“I couldn’t find this particular size anywhere else, not even Meijers," Flowers said. “So Kmart came through for me.”

Several shoppers praised the store's clothing departments and the discounts they said they find there.

Dewey Minard, 73, of Marshall, a retired butcher, said the coat he was wearing was on sale at the Kmart for just $12. And once he brought it to the store's cash register, it rang up at an even a lower price, he said.

“We shop here quite often. I hate to see these stores close," he said.

'I hope it stays'

Several shoppers recalled having shopped at Kmart for years, visiting stores that closed long ago. Now, the Marshall Kmart is the only location left near them.

"I’m originally from Indiana, and we had Kmart right at home where we shopped until they went out," said Mark Mitchell, 57, who lives about 25 miles away in Springport. “I hope it stays. I like to shop here.”

Many worried about how long the store can hang on.

“It’s sad to see this is gonna be the last one left," said Robert Plessinger, 34, of Albion. "That means it ain’t gonna be too much longer before they close it."

Said to be profitable

The shopping center, including the Kmart's real estate, is owned by California businessman Joseph Choi, who purchased the property for $5.45 million in 2015, according to city assessor records.

"They do have a lease with us," he said of Kmart.

In a phone interview Monday, Choi said a former manager at the Kmart once described the store as one of the company's better-performing locations. Earlier this year, Choi said he was told again that the store's sales numbers are good.

The Kmart's immediate neighbor in the shopping center is an optometrist's office. Brenda Hoyt, the office's manager, said the strip mall was especially busy until about four years ago, when a Secretary of State branch closed. That spot is now the cash advance shop, called Cash Store.

Hoyt said the Kmart provides an important convenience for locals.

“You can go in and buy a birthday present if you need to, without going out of town," she said. "Clothes, toys, projects for the kids for school — you can get it here.”

Tarkiewicz, the city manger, said he has often heard seniors share how they like the Kmart because it is not as big as some newer big-box stores.

“I’ve heard from older people that Walmarts and Meijer stores are very overwhelming in size, and this store is very maneuverable for a senior," he said. “They like going here because it’s not a big mega store.”

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Hello, Transform Holdco

Kmart and Sears stores avoided a potential liquidation scenario this year when their parent company, Sears Holdings, was purchased out of bankruptcy in February by its chairman, largest shareholder and former CEO Eddie Lampert's hedge fund, ESL Investments, in a $5.2 billion deal.

There were about 425 stores and 45,000 employees left at the time of the sale. Once the latest round of store closures is done, the two retailers' holding company, now called Transform Holdco, will have a total of just 182 Sears and Kmarts, according to Business Insider.

Tarkiewicz said he hopes that Marshall's Kmart can stay off the company's seemingly never-ending list of store closures.

"We don’t know what the future is for the corporation, but we hope it stays,” he said.

Contact JC Reindl at 313-222-6631 or jcreindl@freepress.com. Follow him on Twitter @jcreindl. Read more on business and sign up for our business newsletter.