The Associated Press title Boston department store retailer, KMart, to acquire online retailer Amazon article Buyers: Boston department stores retailer KMart has been buying online retailers, including Amazon, in recent years and plans to spend up to $2.5 billion buying up to 500 stores across the U.S. and Canada.
Kmart is expected to announce a formal agreement to acquire the online retailer on Tuesday, according to people familiar with the matter.
The transaction will include an unspecified number of stores in Massachusetts and up to 50 other locations, they said.
The deal will come as a surprise to many Massachusetts residents who have been anticipating a big buy.
It comes after a decade of decline in online sales and a steep drop in the number of department stores.
The state’s population fell by 9.7 percent from 2014 to 2016, according the U, while its retail business dropped by 1.4 percent over the same period, according a U.N. report released this month.
Maintaining that momentum will be critical for the state’s economy as shoppers continue to shop online, said Michael McGovern, chief economist with the University of Massachusetts System.
The sale of online retailers has been a key element of the state budget plan for years, as retailers have faced growing competition from other retailers in online shopping.
The Massachusetts Department of Transportation plans to close its entire online retail presence by 2025, and it expects to see a significant reduction in online purchases in the next decade.
The department store company has already announced plans to shutter stores in Boston, Burlington, Worcester and Somerville.
The department stores in Springfield and Worcester are closing this year.KMart plans to continue to operate brick-and-mortar stores and will retain its existing online sales channels, including e-commerce, said Mark Sadowski, a spokesman for KMart.
The company has a strong presence in online retail, but it has not had a significant impact in its business since its online store model was first introduced, Sadowskis said.
Kmart’s strategy has been to expand online sales in the last three years.
The company has grown from 4,500 to nearly 14,500 online sales this year, according.
The increase was primarily driven by e-retailers such as Amazon.
The retailer plans to increase online sales by 50 percent next year.
In an interview, Sadowksi said KMart will be able to focus on improving its business model.
The move will allow the company to better compete with other online retailers and provide better access to its customers, he said.