Deal to buy Sears will help Kmart

The merger will improve consumer confidence, Wilson said, adding that "I still have people asking, 'Are you going to close?'"

The deal will give both stores more resources, he added.

"It will have a better buying power now, a better base," he said.

He said the Prescott Valley store off Highway 69 has been open since 1992 or 1993 and has 100 employees.

The managers of the Prescott store of Kmart – on Willow Creek Road –and Sears at the Prescott Gateway mall were off work Wednesday, and assistant managers referred calls to corporate headquarters. The Prescott Kmart opened in 1979 and Sears opened with the mall in March 2002.

"The Kmarts and Sears that are operating right now will continue to do so through the holidays," Sears spokesman Chris Brathwaite said. "There will still be Sears nameplate stores and Kmart nameplate stores."

Retail analysts have said aggressive discounters such as Wal-Mart have hurt traditional chain department stores such as Sears and discount retailers such as Kmart.

The store manager of the Wal-Mart supercenter, which opened in October 2003 at Highway 69 and Prescott Lakes Parkway, wished both stores well. Wal-Mart will open a second supercenter, on Gail Gardner Way, in January. "If it will be good for Kmart, if it will be good for Sears, then I will be happy for both companies," Joel Peterson said. "I think that competition is always a good thing."

The merger of Kmart and Sears will make the new company the third largest retailer in the country, behind Wal-Mart and The Home Depot, which has an outlet in Prescott.

Both chains would survive, but several hundred stand-alone Kmarts throughout the country are expected to become Sears stores. The goal: A quick kick-start to sales away from Sears' traditional base of shopping malls.

Kmart Holding Corp. chairman Edward Lampert and Sears chairman and CEO Alan Lacy, in announcing the deal Wednesday, promised as much as $500 million a year in savings within three years from store conversions, back-office job cuts, more efficient buying of goods and possible store closings.

Shares of Kmart and Sears surged on the news, but some analysts are skeptical that it amounts to a home run.

"Both have been broken in some sense," said Dan Hess, president and chief executive of Merchant Forecast, an independent research company. "Kmart has to learn to survive in a Wal-Mart world and Sears needs to learn to survive in a world of Home Depot and Lowe's."