Kmart Corporation (2002)

Kmart's 2002 bankruptcy was the largest retail bankruptcy in U.S. history at the time - $17 billion in liabilities. The discount retailer had lost the Walmart war over two decades. Attempts to compete on price failed against Walmart's logistics superiority. Attempts to go upscale failed against Target's brand positioning. Kmart occupied the worst possible position: too expensive for price-sensitive customers, too downmarket for quality-conscious ones. The company emerged from bankruptcy in 2003, merged with Sears in 2005, and continues declining.