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FOR IMMEDIATE RELEASE

KMART CORPORATION REPORTS FIRST QUARTER 2001 FISCAL RESULTS

TROY, Mich., May 17, 2001 - Kmart Corporation (NYSE: KM) today reported its financial results for the first quarter of 2001, highlighted by positive trends in same-store sales, merchandise in-stock position and customer service.

For the 13-week period ended May 2, 2001, Kmart's net sales were $8.337 billion, an increase of 1.7% from $8.195 billion for the 13-week period ended April 26, 2000. As reported, same-store sales increased 1.7% in the first quarter of fiscal 2001. The company reported a net loss of $25 million, or $0.05 per share versus net income of $22 million, or $0.06 per share, for the 13-week period ended April 26, 2000. Excluding a charge for employee severance and Voluntary Early Retirement Program (VERP), the company reported a net loss of $10 million, or $0.02 per share.

"These results are in-line with our plan to fix our business by taking decisive, aggressive, and focused steps to transform our company," said Chuck Conaway, Chairman and CEO of Kmart Corporation. "We continue to strive to provide world-class execution, deliver superior customer service and differentiate ourselves from our competitors."

Mr. Conaway added, "We are making strong progress on several key operating metrics. The company's in-stock levels have improved from 79% in October 2000 to 88% at the end of the first quarter of 2001. Likewise, Kmart's Super Service Index (SSI), our measure of service excellence, has increased from 40% last fall to 57% today."

Gross margin for the first quarter of 2001 was 20.7% of sales, compared to 20.8% last year. Selling, General and Administrative expense, as a percentage of sales, was 19.7% excluding the charge for employee severance and VERP in the first quarter of 2001 versus 19.3% in the same quarter in 2000.

For the first quarter, Kmart opened ten new discount stores, one supercenter and closed three discount stores. As of May 2, 2001, Kmart operated 2,113 stores.

Cautionary Statement Regarding Forward-looking Information

Statements, other than those based on historical facts, which address activities, events, or developments that the Company expects or anticipates may occur in the future are forward-looking statements which are based upon a number of assumptions concerning further conditions that may ultimately prove to be inaccurate. Actual events and results may materially differ from anticipated results described in any forward-looking statements. The Company's ability to achieve such results is subject to certain risks and uncertainties, including, but not limited to, economic and weather conditions which affect buying patterns of the Company's customers, changes in consumer spending and the Company's ability to anticipate buying patterns and implement appropriate inventory strategies, continued availability of capital and financing, competitive factors, and other factors affecting business beyond the Company's control. Consequently, all of the forward-looking statements are qualified by these cautionary statements and there can be no assurance that the results or developments anticipated by the Company will be realized or that they will have the expected effects on the Company or its business or operations.

Kmart Corporation is a near-$40 billion company that serves America with more than 2,100 Kmart and Kmart supercenter retail outlets. In addition to serving all 50 states, Kmart operations extend to the Caribbean Islands and Asia Pacific. More information about Kmart is available on the World Wide Web at www.bluelight.com under the "About Kmart" section.