Kmart isn’t closing all of its stores. Nope. That’s the company’s official policy, and what they tell anyone who asks. Yes, they’re closing some stores, both gradually and in big batches, but that’s part of the company’s “transformation from a traditional, store-network based retail business model to a more asset-light, member-centric integrated retailer.” Yet some employees are quietly worried that the whole chain is about to shut down. Update: Kmart denies this report.

The most frightening thing that employees reported to Business Insider is that stores have been mysteriously designated “Phase 1” and “Phase 2.” Those phases totally do not have anything to do with whether the stores are closing, management tells them: they’re phases in a “path to profitability” that isn’t working yet.

Employees’ private discussions between stores show that one of these “phases” includes purging the warehouse and putting all stock out on the sales floor, a sort of silent liquidation sale. If there isn’t room on the shelves, they’re to put up extra temporary shelves, as long as everything is out there.

A Sears Holdings spokesman told Business Insider that this is not the case, and the warehouse purges are part of an effort to keep employees out in the store among customers, and to “improve inventory management.”

Nervous employees note that stores tend to close about six months after the merchandise purges begin. In a chain that has seen hundreds of stores shut down in the last few years, they’re right to be nervous.

Kmart workers believe all the stores are going to be imminently shut down [Business Insider]

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