Cash-strapped US grocer Kmart said it is to close 326 stores and a distribution centre and slash about 37,000 jobs in a bid to emerge from bankruptcy by the end of April - earlier than expected.

Kmart said it expected the move to improve cashflow by about $500m in 2003 and would leave Kmart with about 1500 stores.

The closures, across 44 states, will result in a charge of $1.7bn. And follows the 284 stores Kmart shut with the loss of 22,000 jobs in January 2002 when it filed for Chapter 11 protection.

Kmart said like-for-like sales in December fell 5.7%, an improvement on November’s fall of 17.2%.