Sears, Roebuck & Co., which last month reported disappointing fourth-quarter results, said Monday that it will close its 82-year-old Chicago merchandise distribution center and phase out four other facilities as part of a restructuring that will eliminate about 6,000 jobs.
About 1,800 positions will be cut at the Chicago location, which opened in 1905 and was the retailer's first major distribution facility. The other centers to be closed are in Boston, Atlanta, Memphis and Minneapolis, with the Boston warehouse closing early next year and the others being shuttered sometime after 1988. They employ about 3,700 workers, some of whom will be placed in other jobs.
Michael Bozic, chairman and chief executive of Sears' merchandise group, said the company plans a one-time, after-tax charge of about $20 million in the first quarter of 1987 to cover the closings, which he estimated will result in annual savings of about $150 million by 1991.
"Streamlining our distribution system will be a major step toward Sears' objective of being an efficient, low-cost provider of goods and services through our retail stores and catalogues," Bozic said.
The moves follow other actions by the nation's largest retailer to cut costs and become more competitive. Last year, the company closed regional headquarters offices in Alhambra, Philadelphia, Atlanta and Skokie, Ill. Earlier this year, it began phasing out a Seattle warehouse, transferring distribution responsibilities to the Los Angeles facility, at 2650 E. Olympic Blvd.
Seven Facilities Planned
Sears, which employs 324,000 in its merchandising group, also has discontinued its World Trade Group's domestic operations and established a unit to investigate possibilities in specialty retailing.
As part of the distribution restructuring, the company will establish a nationwide network of seven regionally managed facilities: Los Angeles; Columbus, Ohio; Dallas; Greensboro, N.C.; Jacksonville, Fla.; Kansas City, Mo., and Philadelphia.
Sears said it will evaluate productivity at the Los Angeles and Philadelphia centers to determine whether they should be modernized or relocated. However, spokesman Philo Holland said those facilities would not be moved outside their regions.
Sears also said it will centralize in Chicago most responsibility for ordering inventory, resulting in the closings of departments in Atlanta, Dallas, Los Angeles and Philadelphia and the elimination of several hundred jobs. Some of those employees will be transferred to Chicago.
Of 2,250 employees at the Los Angeles distribution center, Holland said about 325 will be affected by the closings of two departments: accounting and ordering. However, he said, the company will attempt to place some of those employees in other jobs after union negotiations.
Eligible employees will be offered early retirement as well as severance pay and job-placement services, the company said.