At the Kmart discount store in Middlesex Mall in suburban South Plainfield, New Jersey, the work is already under way. "Kmart + Sears = Sears Essentials," says the red and blue sign on the main doors. "Two Great Stores - One Big Idea."

Inside, new flooring is going down, wires are hanging from the ceiling, and there is the sound of hammering, together with special 20 per cent clear out reductions on everything from carpets to car parts.