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Kmart Cuts HQ Jobs, Revised Home Depot Real Estate Deal

TROY, Mich. - Kmart Holding Corp. has cut 10 percent of its headquarters staff, which accounts for some 200 to 300 people, according to published reports.

Departments reportedly affected by the layoffs include information technology, human relations, public relations, and video networking.

In other news, Kmart said Home Depot, Inc., will buy fewer Kmart locations than originally planned, after the home improvement retailer said certain closing conditions of the deal weren't satisfied.

As reported in June, Atlanta-based Home Depot had initially entered into an agreement that provided for the sale of up to 24 stores for a purchase price of up to $365 million, subject to the satisfaction of various conditions. Kmart now says that under a revised deal, Home Depot will purchase no fewer than 13 Kmart units for $173 million in cash, and up to 19 stores for $288.5 million in cash. Kmart also received an option to sell certain stores, which would raise the minimum number of stores sold to 15, and the minimum cash price to $214 million.

The beleaguered discounter said Home Depot has already completed the purchase of four stores for $59 million, and that the sale of the remaining nine stores is expected to be complete within the next week.

Kmart said it is commencing store-closing sales on those stores sold to The Home Depot promptly upon the consummation of the property sales, and will receive proceeds from the store inventory and fixtures, in addition to the sale proceeds from the Home Depot referred to above.

Kmart will announce second-quarter 2004 earnings Aug. 16.
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