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                                                                   EXHIBIT 10.36

                 SECOND AMENDMENT TO LETTER OF CREDIT AGREEMENT

     This Second Amendment to Letter of Credit Agreement (the "Second
Amendment") is made as of the 23RD day of December, 2004 by and among

     KMART CORPORATION ("Kmart"), a corporation organized under the laws of the
     State of Michigan having a place of business at 3100 West Big Beaver Road,
     Troy, Michigan 48084,

     BANK OF AMERICA, NATIONAL ASSOCIATION ("BOA"), a national banking
     association having a place of business at 100 Federal Street, Boston,
     Massachusetts 02110;

     FLEET NATIONAL BANK ("Fleet" and together with BOA, the "Issuing Banks"), a
     national banking association having a place of business at 100 Federal
     Street, Boston, Massachusetts 02110.

                                   WITNESSETH

     WHEREAS, Kmart and the Issuing Banks have entered into a Letter of Credit
Agreement dated as of August 13, 2004 (as amended and in effect, the "Credit
Agreement"); and

     WHEREAS, Kmart and the Issuing Banks have agreed to amend certain
provisions of the Credit Agreement as set forth herein.

     NOW THEREFORE, it is hereby agreed as follows:

1.   Definitions: All capitalized terms used herein and not otherwise defined
     shall have the same meaning herein as in the Credit Agreement.

2.   Amendments to Article 1.  The provisions of Article 1 of the Credit
     Agreement are hereby amended as follows:

     a.   The definition of "Availability" is hereby deleted in its entirety and
          the following substituted in its stead.

               "Availability" means, at anytime of determination, (i) except as
               provided in clause (ii) below, an amount equal to the difference
               between the amounts on deposit in the Cash Collateral Account and
               100.5% of the Letter of Credit Outstandings, or (ii) if the
               Inventory Collateral Election Effective Date has occurred, the
               difference between the Borrowing Base and 100.5% of the Letter of
               Credit Outstandings.


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     b.   The definition of "Commitment" is hereby deleted in its entirety and
          the following substituted in its stead:

          "Commitment" means $600,000,000, or such lesser amount on account of a
          reduction thereof in accordance with the provisions of Section 2.11
          hereof.

3.   Amendments to Article 2.  The provisions of Article 2 of the Credit
     Agreement are hereby amended as follows:

     a.   The provisions of Section 2.07 of the Credit Agreement are hereby
          deleted in their entirety and the following substituted in their
          stead:

          Kmart or the Subsidiary Credit Parties shall pay to the Issuing Banks,
          an unused fee (the "Unused Fee") equal to 0.125% per annum (on the
          basis of actual days elapsed in a year of 360 days) of the average
          daily balance of the Unused Commitment for each day and ending on but
          excluding the Termination Date. The Unused Fee so accrued in any
          calendar month shall be payable on the first Business Day of the
          immediately succeeding calendar month, except that all Unused Fees so
          accrued and unpaid as of the Termination Date shall be payable on the
          Termination Date.

     b.   The provisions of Section 2.09 of the Credit Agreement are hereby
          amended by deleting clause (a) in its entirety and substituting the
          following in its stead:

          (a) an upfront fee in the sum of $600,000, fully earned on the Closing
          Date, of which $200,000 shall be payable on the Closing Date and the
          balance of $400,000 shall be paid on January 7, 2005, provided that if
          Kmart elects to increase Availability to an amount in excess of
          $200,000,000, a pro rata portion of the unpaid balance of the Closing
          Fee (determined by (i) dividing the amount of increase in Availability
          by (ii) $400,000,000 less the amount of any prior increase in
          Availability in excess of $200,000,000 for which a portion of the
          Closing Fee was paid and (iii) multiplying the result by the unpaid
          balance of the Closing Fee) shall be payable on the effective date of
          each such increase, and

4.   Amendments to Article 5.  The provisions of Article 5 of the Credit
     Agreement are hereby amended as follows:

     a.   The provisions of Section 5.06 of the Credit Agreement are hereby
          deleted in their entirety and the following substituted in their
          stead:

          Kmart shall cause the amounts on deposit in the Cash Collateral
          Account to be at least equal to 100.5% of the Letter of Credit
          Outstandings.


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     b.   The provisions of Section 5.07 of the Credit Agreement are hereby
          deleted in their entirety and the following substituted in their
          stead:

          Intentionally Omitted.

     c.   The provisions of Section 5.10 of the Credit Agreement are hereby
          deleted in their entirety and the following substituted in their
          stead:

          Intentionally Omitted.

5.   Conditions to Effectiveness.  This Second Amendment shall not be effective
     until each of the following conditions precedent have been fulfilled to the
     satisfaction of the Issuing Banks:

     a.   This Second Amendment shall have been duly executed and delivered by
          the Kmart and the Issuing Banks.

     b.   Kmart shall reimburse the Issuing Banks for all expenses incurred by
          the Issuing Banks in connection herewith, including, without
          limitation, reasonable attorneys' fees.

     c.   No Default or Event of Default shall have occurred and be continuing.

6.   Miscellaneous.

     a.   Except as provided herein, all terms and conditions of the Credit
          Agreement and the other Credit Documents remain in full force and
          effect. Kmart hereby ratifies, confirms, and reaffirms all of the
          representations, warranties and covenants therein contained.

     b.   This Second Amendment may be executed in several counterparts and by
          each party on a separate counterpart, each of which when so executed
          and delivered, each shall be an original, and all of which together
          shall constitute one instrument. Delivery of an executed counterpart
          of a signature page hereto by telecopy shall be effective as delivery
          of a manually executed counterpart hereof.

     c.   This Second Amendment expresses the entire understanding of the
          parties with respect to the matters set forth herein and supersedes
          all prior discussions or negotiations hereon.


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     IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to
be executed and their seals to be hereto affixed as the date first above
written.

                                        KMART CORPORATION


                                        By /s/ ALLEN RAVAS
                                           -------------------------------------
                                        Print Name: ALLEN RAVAS
                                        Title: VP TREASURER


                                        FLEET NATIONAL BANK


                                        By /s/ Daniel Platt
                                           -------------------------------------
                                        Print Name: Daniel Platt
                                        Title: Director


                                        BANK OF AMERICA, NATIONAL ASSOCIATION


                                        By /s/ Daniel Platt
                                           -------------------------------------
                                        Print Name: Daniel Platt
                                        Title: Director


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