A top executive of Memco stores sat in his California office yesterday and predicted the company will make a profit by closing the 13 Washington area stores.
Soon-to-be unemployed Memco cashiers sat in a living room in Herndon and contemplated searching for another job, making their house payments and returning Christmas presents they can no longer afford to keep.
Three thousand miles and many moods apart, Memco employes reacted to Monday's abrupt decision by Lucky Stores Inc. to shut down its Memco division and pull out of its only East Coast market.
The closing of Memco early next year will produce what union officials say is the biggest retail job loss in local history. Some 2,000 Memco workers will lose their jobs, twice as many as are to be thrown out of work when the Woolco stores close next month and more than the previous closings of the Korvettes and Lansburgh's chains.
While Woolco workers were told in September that the stores would close after the first of the year, some Memco employes could be out of a job by this weekend.
The stores are not scheduled to close until Jan. 15, but Memco has stopped all shipments of new merchandise and the stores could begin running out of fresh produce and meats by this weekend. "If we don't have any meat, we won't need any meat cutters," said Steve Frick, one of several workers at the Reston Memco who complained about the unexpected store closings at an impromptu press conference in Herndon yesterday morning.
"We will lay off people when they're not needed," confirmed James Koerlin, the Memco executive dispatched from Lucky Stores' headquarters in Dublin, Calif., to preside over the closings. He said the company hopes to reassign employes within stores until the scheduled closing date and indicated some Memco workers may be hired by a firm that will liquidate the merchandise left after the stores close.
Memco will not hold going out of business sales, he said. Instead, a firm that specializes in liquidating inventories plans to buy the store inventories and close out the merchandise.
Memco is the last local "members only" discount store. Memco customers who've paid $1 for two family membership cards can turn in each of their cards for 50 cents credit on purchases before the stores close, Koerlin said.
Some high-priced items including diamond jewelry and watches that can be easily shipped had already been pulled out of the stores yesterday, leaving empty display cases to greet customers. The only other indications that the stores are closing were "All Sales are Final" signs throughout the stores and "10 percent off" signs in the grocery departments.
When the liquidations are completed, the Memco store buildings will be sold or leased to Bradlees, a discount store chain operated by Stop & Shop Companies of Massachusetts. Bradlees will take over not only the 13 operating Memco stores, but also a site in Burke Center where a foundation has been poured for a 14th store, Koerlin said.
Memco opened two new units just before Christmas as part of an attempt to build a big enough cluster of stores to operate more efficiently and profitably. Since the first Memco units opened 12 years ago the chain had become a major force in Washington retailing but the stores were only marginally profitable.
The expansion plans were canceled when the opportunity to sell to Bradlees came along a month ago. Neither Memco nor Bradlee executives would say which company initiated the negotiations.
Lucky Stores Inc. will not only improve its overall profitability by closing the marginal Memco operations, but also will make money by selling the store properties. "We anticipate a profit on the transaction," said Reed L. Buffington, senior vice president for administration in a telephone interview from his California office. "We don't know yet" how much the gain will be, he added.
The prospect that the company will profit by closing the stores only increased the frustration of the soon-to-be-unemployed Memco workers.
"It's not like they weren't making any money, they just weren't making enough money, so 2,000 people are out of a job," complained Sarah Sams, a grocery checker at the Reston store. Sams said she -- like the majority of Memco employes -- is a part-time working mother with little prospect of finding another job as good as her position at Memco.
With the Washington area's high unemployment rate, "everybody in grocery doesn't have a chance of being assimilated," said checker Jackie Friedl, who invited reporters to meet workers from the Reston Memco at her Herndon home.
Friedl and other employes complained that Memco gave them no warning that the stores were closing. "If things were brought out to us a little sooner, people would have done things differently," said checker Steve Frick. "I wouldn't have gone out and spent money on Christmas presents like I did if I knew I wasn't going to have a job," he added.
"I was bringing home half our income," said another clerk who asked not to be named. "My husband bought me a sewing machine for Christmas, now I'm going to have to take it back."