Sears Roebuck & Co., citing low sales and high operating costs, announced yesterday it will close its Northeast Washington store in April, the first closing of a major department store in the city since 1975.
The announcement appeared to catch District officials by surprise. The store is in the heart of an area selected by the city as one of its prime targets for renewal, on Bladensberg Road across the street from the new Hechinger Mall.
Although some retail experts said the new mall may have drawn possible customers from the 52-year-old Sears store, Sears executives refused to directly blame the new mall for its demise.
City officials, who have said they are trying to prevent large businesses that provide entry-level jobs from leaving the city, said they hadn't talked to Sears before yesterday about the closing.
The decision became an immediate political issue with D.C. council member Betty Ann Kane who called the city's lack of knowledge of the Sears action "a stunning example of the city administration's lack of foresight and initiative in trying to keep businesses and jobs in the District." Kane is a candidate for mayor in the fall Democratic primary.
Sears didn't blame city officials for the closing, but said sales at the store have been down "for a fairly long period of time," and that the store is too old to operate efficiently. "The situation is we've got a 1929 building here," said Guy Eberhart, director of pubic affairs for Sears' eastern territory. "The sales performance coupled with the age resulted in inefficiencies."
In addition, Eberhart said the same customers who use the Northeast Sears also use its Alabama Avenue store about four miles away, which was built in 1956. The second store was built to meet projected growth in the area, but since then other stores have moved in cutting down Sears' market share, Eberhart said.
Eberhart said the recession had nothing to do with Sears decision to close the store. He said he wouldn't disclose how much the store lost for the company.
All 70 full-time and part-time employes will be absorbed by other Sears stores, Eberhart said. Since all the employes will have work, some city officials said the closing could have a benefit because the building could be used to produce new jobs. Sears said its real estate subsidiary, Coldwell Banker, is now looking at alternative uses for the building, which Sears owns, such as selling it or developing it some other way.
"It should not have an impact in loss of jobs," said Lawrence P. Schumake III, the city's business and economic development director. The effect on property taxes should be minimal since the building is still there and he didn't know what effect the closing would have on sales taxes.
Schumake also denied the closing will affect momentum of development on plans to upgrade the neighborhood, bordered by small retail stores and buildings boarded up and plastered with old posters along the H Street business corridor.
"The change or upgrading of retail in the area has taken place with the Hechinger mall," Schumake said. "In fact they're exceeding their sales projections." Popularity of the mall partly contributed to Sears demise, Schumake said. "The Hechinger Mall probably accelerated something that was going to happen anyway."
Schumake also said no services will be lost to the community, although some Sears shoppers interviewed yesterday said they will be affected.
"It's very inconvenient because I'd have to go to Landover Mall ," said Elizabeth Thompson, a Northeast resident. The Alabama Avenue store "is out of my area."
"It was a beautiful store here for many, many years," said Ed Trumbule of Hyattsville. "It's a shame. They keep on taking stuff out of the District. I hate to see it."
The last large departmnent store to leave the Washington area was Kann's in 1975, according to Leonard Kolodny, manager of the Greater Washington Board of Trade's retail bureau. Numerous businesses with entry-level jobs needed for the city's unemployed youths have left the city in the last few years because of high taxes and soaring labor costs, according to a city-commissioned survey last year.