A closing K-Mart store usually takes two to three months to go through liquidation. Kmart announced in early 2016 that it was closing 27 stores that would begin liquidating Jan. 24 and last through April. Similar liquidations of K-Mart stores in late 2015 typically lasted between two and three months.
Stores usually try to sell off inventory at discounted prices to raise capital during liquidation. The timing of discounts and closing of the store often hinges on many factors that include the cost of remaining open, the value of inventory, and the need for capital. The length of the liquidation may be governed by local statutes, the expiration of leasing agreements or by the company’s strategic plans.
A strategic liquidation carefully plans product markdowns, inventory transfers to other stores and the timing of store closings, since keeping a store open for even two additional weeks can increase operating costs and negatively affect the profitability of the liquidation. A successful liquidation can place the company in a better financial position by reducing operating expenses, freeing itself of unprofitable locations and demonstrating its ability to raise capital.