One of the largest retailers in the United States has filed for bankruptcy protection. The Michigan-based Kmart has filed for protection from its creditors following a slow holiday sales season and increased competition from other discount retailers.

Kmart is 150 year-old retail chain with more than 2,000 stores today. For years the name Kmart was considered synonymous with low prices, but analysts say today's bargain shoppers are more likely to think first of Kmart's competitor, Wal-mart. Mike Porter is a stock analyst at Chicago based investment information provider "Morning Star." "In a recession, people are focusing a little more on their pocket books, but they want to be sure that, if they are going into one of these discount stores, they are paying as low a price as possible," he says. "And, in the consumers mind, if you walk out of a K-Mart with a basket of goods and you walk out of a Wal-Mart with a basket of goods, Wal-Mart is nine out of ten times going to be cheaper."

Kmart had lower-than-expected sales during the recently completed Christmas holiday shopping season. Several of its suppliers recently stopped shipping to Kmart stores after the company failed to make its payments. The company has told the federal bankruptcy court in Chicago that it's arranged a $2 billion line of credit to help it through a reorganization period. Kmart says it hopes to emerge from bankruptcy next year.

Company chief executive officer Charles Conaway said the chain hopes to keep all of its 2,100 stores open and make them more attractive to shoppers. "They will see updated technology that will help them, as an example, self-scan check out, make it more convenient for them to get in and out of the stores," he says. "They will see a number of new merchandising initiatives that will be able to expedite particularly two new great brands, Joe Boxer, which I am very excited with as well as Disney."

Kmart is the second largest discount chain in the United States behind Wal-Mart. Analysts say the company may be forced to close as many as five-hundred stores as part of its bankruptcy restructuring.