Court Confirms Kmart Plan of Reorganization

Company Targets Planned Closing and Emergence From Chapter 11 on May 5, 2003

Kmart Corporation (Pink Sheets: KMRTQ) announced that the U.S. Bankruptcy Court for the Northern District of Illinois entered and order earlier this evening confirming the Company's First Amended Joint Plan of Reorganization, as modified. Following a confirmation hearing that concluded earlier this evening in Chicago, Judge Susan Pierson Sonderby ruled that Kmart had met all of the necessary statutory requirements to confirm the plan. With this action, Kmart is set to complete its "fast-track" reorganization and emerge from Chapter 11 protection on May 5, 2003. The Company addressed and resolved most of the 188 objections filed by stakeholders and the remaining objections were overruled by the bankruptcy court.

Kmart President and Chief Executive Officer Julian Day said, "We appreciate the strong support of our Plan of Reorganization by creditors, lenders and planned investors. They have been cooperative and constructive partners throughout Kmart's reorganization process. We are also grateful to our vendors, customers and associates for their continued support during this challenging time, and we greatly appreciate the time and attention Judge Sonderby and the bankruptcy court, clerks and staff have given to this case."

Day continued, "Although the end of our Chapter 11 reorganization is now fast approaching, the actions we have taken to restructure Kmart will continue at a rapid pace. Upon emergence, we will be able to put an even greater focus on strengthening the Company's operational and financial performance. In particular, we will aggressively pursue opportunities to increase revenues, reduce costs and increase asset productivity. While there is much hard work ahead, our management team and associates are committed to facing the Company's challenges with renewed enthusiasm and energy."

Edward S. Lampert, Chairman and CEO of ESL Investments, Inc., a major investor in Kmart, added: "Kmart will emerge a stronger company, with a healthy balance sheet, a store-centric philosophy and the right leadership to revitalize this organization. Going forward, Kmart will have a corporate governance structure that will allow the Company to focus on the creation of long-term value. We welcome the opportunity to work with Julian Day, his management team, and all of the Kmart associates to build a brighter future for Kmart."

Kmart Corporation is a mass merchandising company that serves America through its Kmart and Kmart SuperCenter retail outlets. The Company's common stock is currently quoted on the Pink Sheets Electronic Quotation Service ( ) under the symbol KMRTQ.

Cautionary Statement Regarding Forward-Looking Information and Other Matters

Statements made by Kmart which address activities, events or developments that we expect or anticipate may occur in the future, including certain of the information contained in the Plan of Reorganization and Disclosure Statement, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect the Company's current views with respect to current and future events and financial performance. Such forward-looking statements are and will be, as the case may be, subject to many risks and uncertainties, including, but not limited to, Kmart's having filed for bankruptcy and factors relating to Kmart's operations and the business environment in which Kmart operates, which may cause the actual results of Kmart to be materially different from any future results expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially from these forward-looking statements include Kmart's ability to operate pursuant to its exit financing facility that becomes effective following consummation of the Company's Plan of reorganization; the ability of the Company to consummate the Plan and the transactions contemplated by the Plan; the ability of the Company to obtain and maintain normal term with its vendors; the ability of Kmart to attract and retain customers; and those set forth in Kmart's Annual Report on Form 10-K/A for the fiscal year ended January 29, 2003, or in other filings made, from time to time, by Kmart with the Securities and Exchange Commission (the "Company Filings"). The forward-looking statements speak only as of the date when made and Kmart does not undertake to update such statements.

The terms of the Company's plan of reorganization, which can affect the value of our various pre-petition liabilities, common stock and/or other securities, have been confirmed by the bankruptcy court. Accordingly, the Company urges that appropriate caution be exercised with respect to existing and future investments in Kmart common stock or any claims relating to pre-petition liabilities and/or other Kmart securities and urges holders thereof to review such plan carefully before making any decisions with respect to any such investments.

SOURCE: Kmart Corporation

CONTACT: Kmart Media Relations, +1-248-463-1021

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