The Kmart in Keebler Crossing will permanently lock its doors in early September. The mega retailer opened in Collinsville in September 1989.

The Collinsville Kmart, which will close permanently in early September 2014 / Photo by Roger Starkey

A company representative notified the City of Collinsville Monday that the store will not renew its lease because the store is “sales negative” and has been underperforming for some time, Economic Development Director Erika Kennett said.

Howard Reifs, director of corporate communications for Sears Holdings Corporation, the parent company of Kmart, said store closings are part of a series of actions the company is taking to reduce ongoing expenses, adjust their asset base and speed the transformation of its business model.

“These actions will better enable us to focus our investments on serving our customers and members through integrated retail – at the store, online and in the home,” Reifs said in a written statement.

The store has 84 employees, most of whom are part-time or hourly, Reifs said. Eligible employees will receive severance and have the opportunity to apply for open positions at area Sears and Kmart stores.

A liquidation sale will begin June 22, Reifs said.

The City will be proactive in working with the building’s owner, developers and retailers to secure a new tenant for the property, located in the city’s business district, Kennett said.

“We will be happy to work with anyone interested in this property,” Kennett said. “There could even be an opportunity to do redevelopment, similar to what happened in Fairview Heights.”

After the Kmart in Fairview Heights closed, the immediate area was redeveloped. The Sports Authority and Fresh Thyme are new tenants at the location.

Kennett said she would not be surprised if the city starts to hear from developers and business owners interested in the property very soon.