Sears Savings Bank plans to close all but one of its remaining 41 branch offices in California, a move that will result in the layoff of 460 workers, the financial institution said Wednesday.
The 40 Sears Savings Bank offices affected by the closure are in Sears, Roebuck department stores throughout the state and are one element of the cluster of Sears companies that offers a potpourri of financial services to California customers.
Most of the closures affect Sears Savings' branches in Los Angeles, San Diego and Orange counties. The one branch office that will remain open is at Sears Savings' corporate headquarters in Glendale.
The announcement follows a similar move earlier this year, when Sears Savings sold 50 of its 91 branches to Citicorp Savings. The 50 were all outside Sears stores.
Sears Savings expects the closures to be completed by the end of this year. About 85,000 California households have accounts in the 40 branch offices.
Sears Savings spokesmen sought to play down the significance of the move, pointing out that the savings and loan firm is keeping all of its $5.5 billion in assets and all but $280 million of its $3.9 billion in deposits.
"The important thing to remember is the bank is still there," said company spokesman Paul R. Marrone. "This transaction takes away 40 limited-transaction distribution points. That's it." The S&L will continue to employ about 100 people, he added.
Some competitors, though, saw a more symbolic significance to the cutback.
"The whole concept of in-store retail branch offices doesn't work," said a Southern California banking executive who asked not to be identified. "At least, it doesn't work for them."
Sears, Roebuck, the nation's largest retailer, offers financial services through what are known as Sears Financial Network Centers.
Among other products, these centers offer insurance, brokerage accounts and banking services, including checking accounts.
The only service being discontinued is the checking account, Marrone said.
Customers may continue to buy certificates of deposit through Dean Witter, the brokerage operation, and obtain home loans through Sears Mortgage Corp., he said.
California Federal Savings & Loan in Los Angeles has agreed to absorb $165 million in deposits at 22 of the offices targeted for closure. Another $115 million in deposits at the other 18 offices will either be transferred to the Glendale office or, at customers' requests, transferred to other financial institutions.
The balance of Sears Savings' deposits--amounting to more than $3.6 billion--will remain at the headquarters office. Most of them are institutional deposits typically in accounts of about $100 million, Marrone said.
Several past or present employees interviewed Wednesday said that the closures come as little surprise. The earlier branch sale to Citicorp, they said, led to a plunge in employee morale and sparked the departure of key executives.
One former branch manager also maintained that Sears Savings erred last year when it began closing its retail offices at 6 p.m. Formerly, the branch offices did not close until the Sears, Roebuck stores themselves did--usually around 9 p.m.
"That was the beginning of their downfall," he said. "What drew the customers were the (extended) hours."
Marrone said the branch offices simply did not raise enough deposits to justify the cost of keeping them open and staffing each of them with up to five employees.