Kmart has been committing slow suicide for the last 20 years or so.
I can remember when I was a kid, how you could go to Kmart and find everything you needed to tune you car. Price was less that local Auto Parts Store, and they had a wide selection: points, plugs, caps, wires, etc. Somewhere around the early 80's the selection was reduced to pine tree air fresheners and floor mats. Their selection and quality storewide dwindled to nothing and the price was nothing to wrie home about.
Come the 90's they started reducing hourly overhead (read that: people who actually do the work in the store). They also ditched the Blue Light. I have a friend who used to manage a local Kmart. Home office never allowed him to staff the store effectively. When they announced that they were changing his store to a "Big K" super-Kmart, he quit to become a car salesman. He had better than 15 years in Kmart and saw the writing on the wall.
Kmart simply sucks. Don't ask me, ask Rain Man.
That's why they're in trouble.