UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT ~~Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934~~

~~Date~~Pursuant ofto ~~Report~~Section 13 or 15(~~Date~~d) of ~~earliest~~the ~~event~~Securities ~~reported):~~Exchange ~~January 31,~~Act ~~2005~~of 1934

Date of Report (Date of earliest event reported): February 10, 2005

Kmart Holding Corporation

(Exact name of registrant as specified in its charter)

Delaware	000-50278	32-0073116
(State or other jurisdiction of	(Commission	(IRS Employer
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)
incorporation)	File Number)	Identification No.)


3100 West Big Beaver Road, Troy, Michigan		48084

(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (248) 463-1000

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): x Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13.e-4(c)

þ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13.e-4(c)

TABLE OF CONTENTS

	Item 1.01 Entry into a Material Definitive Agreement.
	Item 4.02 Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.
	Item 8.01. Other Events.
	Item 9.01 Financial Statements and Exhibits.
SIGNATURES
EXHIBIT INDEX
EX-99.1: PRESS RELEASE
EX-99.1 AGREEMENT

Item 14.0102 ~~Entry~~Non-Reliance ~~into~~on Previously Issued Financial Statements or a ~~Material~~Related ~~Definitive~~Audit ~~Agreement~~Report or Completed Interim Review.

(a) On ~~January~~ February 3110, 2005, the Audit Committee of Kmart Holding Corporation (“Kmart”) ~~entered~~concluded ~~into~~after management’s anrecommendation ~~agreement~~that (the ~~“Agreement”)~~ ~~with~~previously ~~Sears~~issued ~~Holdings~~financial statements ~~Corporation~~as ~~(“Holdings”)~~of April 30, ~~ESL~~2003 ~~Partners,~~and ~~L.P.,~~as ~~ESL~~of ~~Investors,~~and for the 13-weeks ~~L.L.C.~~ended July 30, ~~ESL~~2003, ~~Institutional~~the ~~Partners~~13 and 26-weeks ended October 29, ~~L.P.~~2003, ~~and~~the ~~CRK~~39-weeks ~~Partners~~ended IIJanuary 28, ~~L.P.~~2004, (the 13-weeks ~~foregoing~~ended ~~entities~~April 28, ~~other than~~2004, ~~Kmart~~the 13 and ~~Holdings~~26-weeks ended July 28, ~~collectively~~2004, and the ~~“ESL~~13 ~~Companies”).~~and ~~The~~39-weeks ~~ESL~~ended ~~Companies~~October 27, ~~are~~2004 ~~controlled~~should no longer be relied upon. Accordingly, Kmart ~~directly~~has orfiled ~~indirectly,~~an byamendment ~~ESL~~to ~~Investments,~~its ~~Inc.~~Form 10-K for the year ended January 28, ~~which~~2004 in ~~turn~~order isto ~~controlled~~restate bythe ~~Edward~~audited S.financial ~~Lampert~~statements contained therein and amendments to its Form 10-Q filings for the quarters ended April 28, 2004, July 28, 2004 and October 27, 2004 in order to restate the ~~Chairman~~unaudited ofinterim ~~Kmart~~financial statements contained therein.

~~Pursuant~~In toconjunction ~~the~~with ~~Agreement,~~their ~~the~~review ~~ESL~~of ~~Companies~~Sears ~~converted,~~Holdings Corporation’s registration statement on Form S-4 in ~~accordance~~connection with the ~~terms~~pending ofmerger ~~the notes~~between Kmart and Sears, Roebuck ~~all~~and ofCompany (“Sears”), the ~~outstanding~~Securities ~~9.00%~~and ~~convertible~~Exchange ~~subordinated~~Commission (the ~~notes~~“SEC”) ofreviewed Kmart’s ~~into~~Form ~~an aggregate of~~10-K ~~6,269,998~~for ~~shares~~the ofyear ~~Kmart~~ended ~~common stock~~January 28, ~~plus~~2004. ~~cash~~Upon inshareholder ~~lieu~~approvals of ~~fractional~~the ~~shares,~~merger ~~and~~transaction, ~~in consideration~~Sears ofHoldings ~~such~~Corporation will ~~conversion,~~be ~~received~~a annew ~~aggregate~~retail ~~payment~~company resulting from ~~Kmart~~the merger of ~~$3.3 million~~Kmart inand ~~cash~~Sears. ~~This~~ ~~cash~~As ~~payment~~a isresult ~~approximately~~of ~~equivalent~~this ~~to the discounted~~review, ~~after-tax~~it ~~cost~~has ~~of the future~~been ~~interest~~determined ~~payments~~ that ~~would have otherwise been paid by~~ Kmart todid ~~the~~not ~~ESL~~reflect ~~Companies~~an inembedded ~~the~~beneficial ~~absence of the~~ conversion ~~(calculated~~feature byof ~~multiplying~~ the ~~present~~convertible ~~value~~note ofissued ~~such interest payments by one~~upon ~~less~~emergence anfrom ~~assumed effective tax rate for Kmart)~~bankruptcy.

The ~~Agreement~~accounting ~~also~~treatment ~~provides~~of ~~that~~ the ~~options~~note tois ~~acquire~~based ~~shares~~on the determination of ~~common~~a ~~stock~~commitment date as defined by Emerging Issues Task Force No. 00-27 “Application of ~~Kmart~~Issue ~~(the~~No. 98-5 to Certain Convertible Instruments” (“~~Investment~~EITF ~~Options~~00-27”),. ~~which~~A ~~were~~commitment ~~issued~~date ~~pursuant~~occurs towhen, anamongst ~~Investment~~other ~~Agreement~~things, ~~dated~~an asagreement ofis ~~January~~binding on both parties and the agreement specifies ~~24,~~all ~~2003~~significant terms, asincluding ~~amended,~~the ~~among~~quantity ~~ESL~~to ~~Investments,~~be ~~Inc~~exchanged. ~~and~~Kmart ~~Third~~believed ~~Avenue~~that ~~Trust,~~it onhad ~~behalf~~met ofthese ~~its~~qualifications as of ~~investment~~the ~~series,~~initial ~~will~~agreement bedate ~~exchanged~~and accounted for ~~options~~the tonote ~~acquire~~accordingly. ~~the~~The ~~same~~SEC ~~number~~believes ofthat ~~shares~~at the time of ~~common~~the agreement ~~stock~~these ofconditions ~~Holdings~~had (not been met, and therefore a commitment date did not occur until issuance of the ~~“Holdings~~note. ~~Options”)~~After atdiscussions with the ~~same~~SEC, ~~exercise~~Kmart ~~price~~has ~~upon~~agreed ~~consummation~~to restate its financial statements. The amendments reflect a May 6, 2003 commitment date, resulting in a portion of the ~~mergers~~ ~~involving~~note ~~Kmart~~being ~~and~~allocated ~~Sears~~to stockholders’ equity, ~~Roebuck~~as ~~and~~required Coby EITF 00-27. The ~~Holdings~~restatement ~~Options~~resulted ~~will~~in ~~have~~a non-cash charge to interest expense of $5 million during the ~~same~~13-weeks ~~terms~~ended July 30, 2003, $8 million and $13 million dollars during the 13 and ~~conditions~~26-weeks asended October 29, 2003, respectively, $22 million during the ~~Investment~~39-weeks ~~Options~~ended ~~and~~January 28, ~~will~~2004, ~~expire~~$2 million during the 13-weeks ended April 28, in2004, ~~accordance~~$2 million ~~with~~and ~~their~~$4 million ~~terms~~during the 13 and 26-weeks ended July 28, on2004, ~~May~~respectively, and $2 million and $6 million during the 13 and 39-weeks ended October 27, ~~2005~~ 2004, respectively, due to the amortization of the debt discount.

The ~~Agreement~~authorized ~~was~~officers ~~approved~~of byKmart's management reviewed the accounting treatment and disclosures referred to in this Item 4.02(a) and discussed such treatment and disclosures with BDO Seidman, LLP and PricewaterhouseCoopers LLP, Kmart’s independent registered public accounting firms. The Audit Committee, asalso ~~contemplated~~reviewed by the ~~rules~~accounting oftreatment ~~the NASDAQ~~and ~~Stock~~disclosures ~~Market~~referred ~~for~~to ~~related~~in ~~party~~this ~~transactions,~~Item as4.02(a) ~~well~~and discussed assuch bytreatment ~~Kmart’s~~and ~~Board~~disclosures ofwith ~~Directors~~BDO Seidman, LLP.

~~The~~Item ~~foregoing description of the Agreement is qualified in its entirety by reference to the full text of the Agreement, a copy of which is included herein as Exhibit 99~~8.101. ~~and~~Other ~~is incorporated herein by reference~~Events.

~~Sears~~On ~~Holdings~~February 11, ~~Corporation~~2005, ~~has~~Kmart ~~filed~~Holding aCorporation ~~Registration~~(“Kmart” ~~Statement~~or ~~on Form S-4 with~~ the ~~SEC (Registration No. 333-120954~~“Company”) ~~containing~~issued a ~~preliminary~~press release ~~joint~~announcing ~~proxy statement-prospectus regarding~~ the ~~proposed~~filing ~~transaction.~~of ~~Stockholders~~an ~~are~~amendment ~~urged~~ to ~~read~~its ~~the~~Form ~~definitive joint proxy statement~~10-~~prospectus~~K ~~regarding~~ for the ~~proposed~~year ~~transaction~~ended ~~when it becomes available~~January 28, ~~because it will~~ ~~contain~~2004 ~~important~~and ~~information.~~amendments ~~Stockholders will be able~~ to ~~obtain~~its aForm ~~free copy of the definitive joint proxy statement~~10-~~prospectus,~~Q ~~as well as other~~ filings ~~containing~~for ~~information~~fiscal ~~about Sears Holdings Corporation, Kmart and Sears, without charge, at the SEC’s Internet site (http://www~~2004.~~sec.gov).~~ ~~Copies~~A ofcopy the definitive joint proxy statement-prospectus and the SEC filings that will be incorporated by reference in the definitive joint proxy statement-prospectus can also be obtained, without charge, by directing a request to Kmart Holding Corporation, 3100 West Big Beaver Road, Troy, Michigan, 48084, Attention: Office of the ~~Secretary,~~press orrelease ~~to Sears,~~is ~~Roebuck~~attached ~~and~~as ~~Co.,~~exhibit ~~3333 Beverly Road, Hoffman Estates, Illinois, 60179, Attention: Office of the Secretary~~99.1 ~~Information regarding Sears Holdings’ proposed directors~~ and ~~executive~~is ~~officers, Kmart’s~~incorporated ~~and~~herein ~~Sears’ directors and executive officers and other participants in the proxy solicitation and a description of their direct and indirect interests,~~ by ~~security holdings or otherwise, is available in the preliminary joint proxy statement-prospectus contained in the above-referenced Registration Statement on Form S-4~~reference.

Sears Holdings Corporation has filed a Registration Statement on Form S-4 with the SEC (Registration No. 333-120954) containing a preliminary joint proxy statement-prospectus regarding the proposed transaction. Stockholders are urged to read the definitive joint proxy statement-prospectus regarding the proposed transaction when it becomes available, because it will contain important information. Stockholders will be able to obtain a free copy of the definitive joint proxy statement-prospectus, as well as other filings containing information about Sears Holdings Corporation, Kmart and Sears, without charge, at the SEC’s Internet site (http://www.sec.gov). Copies of the definitive joint proxy statement-prospectus and the SEC filings that will be incorporated by reference in the definitive joint proxy statement-prospectus can also be obtained, without charge, by directing a request to Kmart Holding Corporation, 3100 West Big Beaver Road, Troy, Michigan, 48084, Attention: Office of the Secretary, or to Sears, Roebuck and Co., 3333 Beverly Road, Hoffman Estates, Illinois, 60179,
Attention: Office of the Secretary. Information regarding Sears Holdings’ proposed directors and executive officers, Kmart’s and Sears’ directors and executive officers and other participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, is available in the preliminary joint proxy statement-prospectus contained in the above-referenced Registration Statement on Form S-4.

Item 9.01 Financial Statements and Exhibits.

(c)

Exhibits.

99.1 Agreement, dated January 31, 2005, among Kmart Holding Corporation, Sears Holdings Corporation, ESL Partners, L.P., ESL Investors, L.L.C., ESL Institutional Partners, L.P. and CRK Partners II, L.P.


Exhibit No.		Description

99.1		Press Release issued on February 11, 2005.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	~~KMART HOLDING CORPORATION~~	KMART HOLDING CORPORATION
	By:	/s/ James F. Gooch
Date: February 14, 2005
Date: February 4, 2005		Name:	James F. Gooch
		By:		/s/ James F. Gooch
		Title:	Vice President, Controller
		Name:		James F. Gooch
		Title:		Vice President, Controller

EXHIBIT INDEX

Exhibit No.		Description
99.1		~~Agreement,~~Press ~~dated~~Release ~~January~~issued ~~31,~~on ~~2005,~~February ~~among Kmart Holding Corporation~~11, ~~Sears~~2005.
		Holdings Corporation, ESL Partners, L.P., ESL Investors, L.L.C., ESL Institutional
		Partners, L.P. and CRK Partners II, L.P.

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