Kmart shoppers. Reuters Kmart employees believe the company is nearing bankruptcy and is in the process of shutting down all its stores. 
 
 The chain has closed one-third of its stores in the last decade, and sales have been cut in half in the same time period. 
 
 Store-level employees who spoke to Business Insider said many of the remaining 941 Kmart stores now appear to be in the midst of liquidation. 
 
 Stores are being entered into numbered phases — such as Phase 1 and Phase 2 — employees said. 
 
 The company has told employees that the phases are part of a "P2P" or "path to profitability" strategy to make stores more profitable. 
 
 But employees say it's a liquidation plan, with each phase triggering different cost-cutting measures such as layoffs and labor-hour reductions. 
 
 The phases have also triggered stock-room purges, meaning all merchandise in the stock rooms must be moved to the sales floor. If there's not enough room on the sales floor for the items, stores will add new overhead shelving. 
 
 Once the stock rooms are purged, stores typically have no more than nine months before they shut down, according to chatter on employee message boards. 
 
 Kmart parent company Sears Holdings denies claims that it's liquidating all its stores. 
 
 "Sears Holdings is highly focused on restoring profitability to the company, and Kmart remains a key piece of our asset portfolio," Sears spokesman Howard Riefs said. 
 
 The stock-room clearances are meant to improve inventory management and keep employees on the sales floor, he said. 
 
 We saw boxes everywhere during a recent store visit to a Kmart in Richmond, Virginia. Business Insider/Hayley Peterson But Kmart employee Mandi Spoolman said the store where she works in Chesapeake, Virginia, is languishing. 
 
 "There are baskets upon baskets of returns," she said. "Freight still in boxes, pilling up because we have nowhere to put them. Racks of clothes just sitting in the back room." 
 
 An employee of a Port Charlotte, Florida, store said his store "is like a flood zone." 
 
 "There are damaged walls and ceiling tiles missing," he said. 
 
 A 30-year Kmart worker in Poughkeepsie, New York, said her store is also suffering from structural issues. She asked not to be identified for fear of losing her job. 
 
 "Ceilings leak when it rains, floor is uneven and cracked... Our air conditioning and heating systems suck... freeze in winter, roast in the summer. Registers are outdated. They keep upgrading system with ancient technology which in turn causes system to crash every now and then. I've been there for 30 years and we have had one remodel in 1997. Fixtures are broken, dented, [and] rusted, which doesn't look nice when new layouts are instituted... The list goes on." 
 
 In addition to speaking with employees, Business Insider also reviewed an online message board that workers said they use to communicate with employees at other stores. 
 
 On the message board, there was a lot of recent chatter about stock-room purges. 
 
 Abandoned shelves and carts cluttered this Kmart store's aisle. Business Insider/Hayley Peterson "Stock room getting cleaned out, putting stock on overheads — which before was a big NO... No hours for part timers, full timers are getting 40 [hours]," one person wrote. 
 
 Another wrote, "We cleaned out the stock room about 3 months ago... We let most of the full timers go around 4 months ago... We still have our 2 [assistant] managers but we haven't had a store manager in almost a year." 
 
 A third person added: "The same is happening at my store. We have cleaned out the stockroom everything has to go out. Nothing gets to go back it's all going on overheads now... I think that we might have until at least December." 
 
 Clearing out stock rooms is the first sign that a store will be shut down, according to several people on the message board. 
 
 The shelves were messy. Business Insider/Hayley Peterson "If you go to the purging stock rooms then that means the store will be closing soon no matter what they tell you," one person wrote. "Could be a month, maybe six, but they are already in the process of planning for it to close once they put it all out on the sales floor." 
 
 One person claimed that even Kmart's most profitable stores are getting their stock rooms purged. 
 
 "Stores with that much sales volume having nothing in the stock room is as clear an indication as any that they do not plan for the Kmart division to be around long," they wrote. 
 
 Sears referred to reports of Kmart's demise as "rumor and speculation." 
 
 "We are currently rolling out a phased project to refine our inventory replenishment process whereby deliveries are directed to Kmart store shelves instead of the stock rooms," Riefs, the Sears spokesman, said. 
 
 "The goal is for our stores to operate more efficiently, deliver improved customer service by enabling our associates to spend more time on the sales floor assisting members and customers, and to drive increased margins. We are already receiving positive feedback from our associates on the changes (e.g., such as their job is now more simple and enjoyable), and we will continue to educate them on the strategy." 
 
 Several employees believe, however, that the company will declare bankruptcy by next summer. 
 
 "It is pretty obvious that the company is not going to be around much longer," one person wrote on the message board. "I have no doubts at all that SHLD [Sears Holdings] will cease to exist by 2020 at the very latest. I'm thinking mid-2017 is when the EKG will go flat with the announcement being made right after the 2016 holiday season." 

 It’s difficult to remember when Kmart wasn’t known for its drain-circling tendencies. At one time in the discount store’s history, parking lots were full, business was booming, and people, you know, actually wanted to shop there. However, by most accounts those days are a distant memory for the chain. Sales have consistently dropped, each new year brings about additional store closures, and it’s hard to see how the brand could revive itself. What happened to make people care so little about a store that was once the largest discount retailer in the country? 
 
 It’s a well-known fact that in their heyday, Kmart stores were the envy of Walmart founder Sam Walton. But while Walmart still reigns with its promise of “always low prices,” Kmart has slipped further into oblivion. The company originally filed for bankruptcy in 2002, making it the largest bankruptcy of a retailer in history. At the time, it trailed only behind Walmart and Target, but still was unable to keep afloat. The company later became a unit of the Sears Holdings Corporation, an outfit that has had its own shares of trouble in recent years. 
 
 At the end of last year, sales in Kmart stores fell 7.2% in the fourth quarter of 2015 — a time when even struggling companies tend to get a boost from holiday sales. Following that (and similar declines in the Sears brand), Sears Holdings announced in February 2016 that it would close several under-performing storefronts, adding up to about 30 Kmart stores by April 2016. Then in April, the corporation announced another round of store closures for the summer months, totaling another 68 Kmart closures across the country. With the summer closings, there will be fewer than 900 stores nationwide, according to data from Fortune. 
 
 The demise of Kmart 
 
 Though 900 stores (give or take a few) is nothing to sneeze at, it’s far from the glory the brand once knew. Even just five years ago, there were more than 1,300 Kmart stores across the country. At the height of its glory days in the early 1980s, the company operated 2,000 or more stores. Sales have plummeted from $37 billion in sales from 2000, to less than a third of that in recent years. 
 
 So what happened in between? There are many factors at play, but experts point to the late ’80s and ’90s for when the wheels started to come off. At that time, the Kmart Corporation bought several other unrelated brands, including the Walden Book Company, Office Max, Borders, and several other companies. Diversification is often a good thing, but in this case many analysts believe Kmart lost its focus. Many of those companies were sold off a few years later to try to regain funds, but the downward spiral was already in motion. Another complaint among experts and customers alike is that the companies don’t invest in updating their stores, automatically giving a dated feel to the brand. 
 
 Others blame hedge fund manager Eddie Lampert, who bought Kmart after its bankruptcy and engineered the new ownership under Sears Holdings. Some suspect Lampert was never going to fully revive either Kmart or Sears, though they debate whether it was intentional or whether Lampert’s hedge fund wizardry simply didn’t translate to managing retail stores. 
 
 No brand strategy 
 
 But among the myriad of issues with Kmart, none are quite so damaging as the fact that no one really knows what the brand stands for, or how it’s supposed to benefit its customers. Compared to its main competitors, Kmart has failed dismally in this area. “We believe that all successful companies — Walmart and Target included — know precisely how they provide value for customers. They make a deliberate choice about their “way to play” in the market, guided primarily by what those companies do uniquely well: their distinctive capabilities,” wrote Paul Leinwand, the global managing director for Capabilities-Driven Strategy and Growth at Strategy&, PwC’s strategy consulting business. 
 
 As Leinwand posits in the Harvard Business Review article, Walmart and Target were both able to define themselves clearly, and stay true to that definition while also adapting to the changing marketplace. Walmart, for example, prides itself on the aforementioned “always low prices,” meaning it chooses products with which it can offer a deal and still capitalize on a profit margin. When margins are too close, like with big appliances and high-end furniture, the store passes on carrying the items. 
 
 Target also focuses on price, but instead chooses products that convey a sense of style and fashion for a reasonable price tag — a strategy Leinwand refers to as mass prestige. “In product and service mix, Target is similar to Walmart in many ways, but Target satisfies the needs of its younger, image-conscious shoppers by stocking more furniture, clothing and exclusive designer merchandise than Walmart,” he writes. 
 
 Kmart, on the other hand, hasn’t been able to successfully define how it provides value to its customers over time. Sure, they offer decent prices, but they’re not always the lowest. They’re also not known for their designer labels and make unsuccessful efforts to highlight the ones they do carry. 
 
 “Long term, retailers have to have a reason for existence that customers love. What do you love about Kmart?” asked Sid Doolittle, a former retail executive and retired founder of McMillanDoolitte retail consulting firm in Chicago, told Ad Age. “There’s nothing really.” 
 
 Kmart today 
 
 Kmart has done its due diligence to try adding to its brand value in recent years. The chain started the “Shop Your Way” program, which gives rewards for shopping at Kmart, Sears, and other partner stores. However, aside from rewards, it’s unclear how the program will be able to redefine the store’s approach to offering products. 
 
 In February 2016, Kmart announced it would begin selling off the goods from other companies who had declared bankruptcy. “The path to making Kmart great again starts with sourcing truly brag-worthy deals,” said Kmart President Alasdair James, touting the move’s “extreme value proposition.” One of those product lines includes smokers, outdoor cookers, and other equipment from Brinkmann, which declared bankruptcy in 2015. 
 
 Extreme value for home goods is one thing — and time will tell if the strategy is successful. However, a January 2016 survey of 3,917 American women by Prosper Analytics & Insights shows that very few women prefer shopping at Kmart for clothing. Kmart is the favorite clothing retailer for just 1.4% of those women, while stores like Kohl’s, Walmart, and Macy’s make up the favorites for 9 to 14% of women, respectively. The only silver lining (and it’s tissue-paper thin, to be sure) is that Kmart scores ahead of Sears for shopping for apparel, with just 1% of women saying Sears is their go-to clothing store. In fact, even Goodwill earned more than love than the department store. 
 
 Time will tell if the new branding and sales strategies will pay off. But even if Kmart is wildly successful, it will take some serious time and effort to make people look twice at the store again. 
 
 Follow Nikelle on Twitter and Facebook 
 
 More from Money & Career Cheat Sheet:
– Kmart says it's "focused on restoring profitability to the company." Employees say it's preparing to declare bankruptcy within a year. As Business Insider reports, Kmart—which has seen sales plummet to less than a third of what they were in 2000—is clearing out stock rooms, putting all merchandise on the sales floor, laying people off, and adopting cost-cutting measures at various locations around the country. Parent company Sears Holdings says the goal is to "refine our inventory replenishment process" and keep employees on the sales floor, where they're apparently happier. "Kmart remains a key piece of our asset portfolio," and reports to the contrary are "rumor and speculation," says a rep. But employees communicating on message boards say it's all part of a liquidation strategy. "If you go to the purging stock rooms then that means the store will be closing soon no matter what they tell you," one person writes. "Could be a month, maybe six, but they are already in the process of planning for it to close once they put it all out on the sales floor." After sales fell 7.2% in the fourth quarter of 2015, Sears announced 68 Kmart locations would close, leaving fewer than 900 in the US, reports CheatSheet. But employees—some of whom describe locations in desperate need of repair—say even profitable stores are clearing out stock rooms, which is "as clear an indication as any that they do not plan for the Kmart division to be around long." Jonathan Heller at the Street writes that one Kmart store he visited in the Jersey Shore "was an utter ghost town." It's just one more sign of "retail's death spiral," he adds.