Kmart in Bridgehampton is one of the last four in the country

One is the loneliest number.

But four isn't exactly a crowd.

The Kmart in Bridgehampton is the retailer’s only store left on Long Island. The Bridgehampton store is also among only four Kmarts left in the U.S., but one of those locations — in New Jersey — will close in April.

The small number of stores remaining is a sharp contrast to the heyday of Kmart, which used to be the nation’s largest discount retailer, with 2,300 stores in the early 1990s. But a series of unfortunate events has left Kmart and its sister chain — Sears department stores — shells of their former selves.

It's unclear what the future holds for the Bridgehampton store, since its parent company isn't talking.

But how has the store survived for 23 years while a dozen other Kmart and Sears stores have closed on Long Island since April 2018?

Location, affordability and a lack of competition are the biggest factors, residents and real estate experts say.

Located at 2044 Montauk Hwy., Kmart is the largest big-box discount store in the Hamptons, a collection of tony beach communities in the towns of Southampton and East Hampton, on the eastern end of Long Island, that are dotted by mom-and-pop shops and high-end boutiques on main streets.

"We don’t have a lot of big shopping areas. Riverhead is the closest and that’s a good half an hour" away, said Julie Greene, Southampton Town historian.

The closest Walmart to the Bridgehampton Kmart is 24.8 miles away in Riverhead, which is outside the Hamptons. The closest Target is 23.3 miles away, also in Riverhead.

The Kmart also benefits from being centrally located, said Southampton Councilman Tommy John Schiavoni, who is the council’s liaison for Bridgehampton.

"Montauk Highway is the main artery on the South Fork. Almost anyone driving through Bridgehampton has to pass Kmart," he said.

There aren’t more big-box stores in Southampton because the town discourages their development, Schiavoni said.

"The code does allow it but there is a significant amount of community input and requirements that go along with it. We certainly put a lot of deference on our community character here. It’s important to us," he said.

Every year, tourists, many of whom are affluent New York City residents, pour into summer homes in the Hamptons.

At Kmart, they can buy household cleaning products, toys, diapers, toiletries, beach towels, suntan lotion and groceries — all in one place. The store also has a selection of large appliances, such as refrigerators, dishwashers, washing machines, dryers and stoves.

Beyond the well-to-do visitors are residents who work at restaurants, stores and other places in the Hamptons year-round and watch their budgets, which Kmart allows them to do, said Melissa Naeder, senior director in brokerage and retail services in the Melville office of commercial real estate firm Cushman & Wakefield.

"So, a lot of them, they need these types of stores," she said.

Southampton and East Hampton, the two towns that make up the Hamptons, have higher poverty rates and lower median household incomes than those of Suffolk and Nassau counties. But summer tourism, which brings in an influx of wealthy visitors, often belies that fact.

The number of residents living below the poverty level in Southampton and East Hampton was 7.6% and 10.9%, respectively, while the rate was 6.9% in Suffolk County and 5.6% in Nassau County, according to 2019 U.S. Census Bureau estimates.

Still, all the rates were lower than the poverty rates of New York state, 14.1%, and the U.S., 13.4%.

"People like to think of my area as affluent," Southampton town supervisor Jay Schneiderman said, "and I would have to try to convince them that we need money for our health clinics, we need money for public transportation, our buses are jammed, our clinics are jammed."

Affordable housing also is an issue for the year-round residents, Schneiderman said.

Many property owners make more money from renting out their houses to wealthy tourists for just two months in the summer than they would renting them year-round to residents, he said.

He's concerned about such a small number of surviving Kmarts having sufficient economies of scale, he said. He worries that "since there are so few of them, whether they can deliver the lower-cost goods or whether they're going to close as well."

One thing that might have helped the Kmart in Bridgehampton is the influx of New York City residents who have moved to the Hamptons full time amid the COVID-19 pandemic since March 2020, Schneiderman said.

There was a 20% population increase — to 97,421 residents — in the towns of Southampton and East Hampton from 2010 to 2020, according to the U.S. Census Bureau.

Transformco, the Illinois-based company that owns Kmart and Sears, did not respond to Newsday’s requests for comment sent over two weeks. A manager in the Bridgehampton Kmart referred media inquiries to the corporate office.

‘There’s nowhere else to go’

On a recent Tuesday afternoon, a handful of people shopped in the Bridgehampton Kmart as light pop music played from the speakers throughout the store.

A sign near the neatly organized store’s entrance said, "Stock up on an expanded assortment of grocery essentials."

In the nearby women’s clothing section, the Jaclyn Smith Collection is still a thing — in 2022. Racks of workwear and trendy clothes in the collection were displayed in front of a poster of the actress, whose partnership with Kmart began in 1985.

Kmart’s famous blue light specials — flashing blue lights that signaled to customers when items were on sale — no longer exist but sale signs were posted throughout the store.

Christmas decorations were on sale beside patio furniture in the middle of the store.

Signs hanging from the ceiling said that clothes and shoes were on sale for up to 60% off.

Girls’ brightly colored Easter dresses were on sale, 40% off, and hanging on a rack near Easter basket supplies.

Southampton resident Michael Cardan, 29, went to the store to pick up burp towels for his newborn daughter, he said. He passes the store daily on his way to and from work, so he shops there out of convenience, said Cardan, who is a managing partner at Fairway Restaurant in Sagaponack.

He's not surprised that Kmart's doors are still open, he said.

"It’s supply and demand. There’s nowhere else to go," he said.

Village of Southampton resident Darra Goldstein, 48, visits the store about once a month for household goods and other items, she said in the parking lot.

While she is willing to drive to Target in Riverhead sometimes, she is a regular Kmart shopper because of the prices and location, said Goldstein, who is an agent in real estate firm Douglas Elliman’s Southampton office and an administrative assistant in The Ellen Hermanson Breast Center at Stony Brook Southampton Hospital.

She also shops at locally owned stores, but tends to shy away from online shopping, she said.

"I like to touch [the products]. I like brick and mortar," she said.

Strong performance

The Kmart is in Bridgehampton Commons, a 287,493-square-foot shopping center whose other tenants include a King Kullen supermarket, Gap, TJ Maxx, Staples and Ulta Beauty.

Occupying 89,935 square feet, Kmart is the largest tenant.

The store opened in 1999 in a space that had been vacated by Caldor, a now-defunct discount retailer that filed for bankruptcy in 1995.

Kmart Corp. paid $7 million to assume Caldor’s lease, which was to run through 2019 and had two, 10-year extensions, according to a February 2000 article published in Newsday.

Bridgehampton Commons is owned by Kimco Realty Corp., a real estate investment trust in Jericho that is one of the largest owners of shopping centers in the nation.

Kimco declined to provide details about the status of Kmart’s lease, other than to say "there is term left."

The store performs well, Kimco spokesman Christopher Ostrowski said.

"Kmart is one of our strongest-performing tenants at Bridgehampton Commons in terms of customer visits over the last 12 months," said Ostrowski, who also said the retailer was paying its rent and was a good tenant.

The first Kmart opened in Garden City, Michigan, in 1962, the same year that Target, Walmart and Kohl’s opened their first stores.

Kmart used to be a dominant retailer across the nation, blanketing suburbs with conveniently located stores that had low prices and good selections of merchandise, said James E. Schrager, clinical professor of entrepreneurship and strategy at the University of Chicago Booth School of Business.

The retailer ran into problems because of its lack of innovation, he said.

"Kmart decided they were never going to update their strategy from 1962. And they slowly became irrelevant as newer, better discounters appeared," said Schrager, who said the chain "never found its fashion footing."

Kmart also lagged in spending money to implement information technology in its store operations, even before the online shopping era began, said Erik Gordon, clinical assistant professor in the University of Michigan’s Stephen M. Ross School of Business.

Meanwhile, Walmart was an early adopter of interoperable, integrated systems for logistics and keeping shelves stocked, he said.

Kmart Holdings Corp. filed for Chapter 11 bankruptcy protection in 2002.

In 2005, Kmart bought Sears, another iconic retailer, in an $11 billion deal, forming Sears’ Holdings Corp., which had about 3,500 stores nationwide.

That deal was illogical because the retailers lacked synergies, Gordon said.

"That merger made no sense at the time. People wondered, What was the point of that?" he said.

Mired in debt and losing shoppers to discount and online retailers, Sears Holdings closed thousands of stores for years, and filed for Chapter 11 bankruptcy protection in 2018.

Sears Holdings’ assets were purchased for $5.2 billion in 2019 by Transformco, an affiliate of former Sears CEO Eddie Lampert’s ESL Investments Inc., but the store closings continued.

The last Sears on Long Island closed in October, in Sunrise Mall in Massapequa. After a Kmart in Sayville closed in 2020, only the Bridgehampton store remained on the Island.

Though 21 Kmart stores are listed on the retailer’s website, only 10 are actually open.

Four are in the United States, including two in New Jersey and one in Miami, and six are in U.S. territories — four in the U.S. Virgin Islands, one in Puerto Rico and one in Guam.

But one of the New Jersey stores, in Avenel, will be closing April 17, a store employee said Thursday.

The store is on a closing list on the website of SB360 Capital Partners, a Needham, Massachusetts-based firm that oversees store liquidations.

SB360 did not respond to Newsday’s request for comment.

By Tory N. Parrish

tory.parrish@newsday.com@ToryParrish1

Tory N. Parrish covers retail and small business for Newsday. She has worked at the Pittsburgh Tribune-Review and Observer-Dispatch in Utica, N.Y.