Target to Take Over 5 Gemcos
Shoppers and employees at Gemco department stores around the San Fernando Valley were shocked Friday by the news that the popular discount chain was being closed and that hundreds of employees will lose their jobs.
Gemco’s parent company, Lucky Stores Inc., announced Thursday that it was closing and selling all of its Gemco stores--70 in California and 10 in Arizona and Nevada--by the end of the year, apparently to blunt a takeover bid by New York financier Asher B. Edelman.
The five Gemco stores in the Valley--in Granada Hills, North Hollywood, Northridge, Pacoima and Woodland Hills--were in a group of 54 stores bought by Dayton-Hudson Corp., which owns the competing Target Stores chain. Those stores will be converted into Targets next year, the company said.
The Gemco in Simi Valley was not bought by Dayton-Hudson.
Gemco offered discounts on everything from stereos to groceries to 5 million shoppers who paid $1 for a lifetime family membership.
Shoppers and employees at Gemco stores in the Valley were talking somberly about the news Friday.
“She’s the broken-hearted one,” said a shopper at the Woodland Hills Gemco, pointing to a friend rolling an overflowing shopping cart to the parking lot.
The friend, Betty Klein, said she has shopped at that Gemco for years. “Everything I need I get here,” she said.
She said the store’s employees, many of whom she considers friends, usually are “all happy and jolly. But today the clerks were quiet.”
An employee in the produce department of the Gemco in Granada Hills shook hands with a customer he said he has served for 13 years. “Good luck,” the customer said. “Maybe I’ll see you at another store some time.”
“Not likely,” the employee responded, still holding her hand. “I’m getting out of this business.”
2 Stores in Valley
Target has been poorly represented in the San Fernando Valley, with stores only in Northridge and Pacoima, said David Houghtby, a spokesman for the Minneapolis-based subsidiary of Dayton-Hudson Corp., the fourth largest retailer in the country.
The opportunity to buy the five Gemco stores came at a good time, Houghtby said. “We’ve been looking hard for attractive sites, and these are terrific sites,” he said.
Target has no plans to give preference to Gemco employees when it staffs its new stores, he said. “We have an open-application process for hiring,” he said.
Andrea Zinder, research director for Local 770 of the United Food and Commercial Workers, which represents about 1,000 Gemco employees, said: “We will do everything we can possibly do to convince Target they have an obligation to keep these people on.”
But she said that Target, which is not unionized, “in the past . . . has refused to hire people who are union sympathizers, supporters or former union members.”
Concern for Employees
Depending on Target’s responsiveness, she said, the union might resort to a lawsuit, picket lines or boycotts.
“We’re obviously very concerned about what is going to happen to the employees,” said Judith Decker, a spokeswoman for Lucky Stores.
She said that the company and employees unions are negotiating severance agreements for workers with contracts, and that the company will offer a job placement service to employees.
As for any plan to have Target hire the Gemco employees, she said: “Target is buying only the buildings. . . . No agreement was reached for employment of those folks.”
The closing of the chain may be felt in Thousand Oaks, where a developer has been planning a shopping center with a Gemco as its centerpiece.
The developer, T. M. Shoraka Inc. of Los Angeles, which is planning the center on a 20-acre site that once held Jungleland amusement park, would not comment on the effect the Gemco closing would have on the project.
Revised Project
Philip Gatch, Thousand Oaks’ planning and community development director, said T. M. Shoraka last week filed a revised plan for the project that included a 124,000-square-foot Gemco.
One potentially bright note for employees at the stores in the San Fernando Valley is that the average Target employs more people than the average Gemco--225 contrasted with 165, according to statistics provided by the two firms.
The fate of the Gemco in Simi Valley is uncertain. It was not purchased by Target because the company is building a store that is scheduled to open in that city in February, Houghtby said.
No plans for the Gemco there were announced by Lucky.
“We’ve got a whole bunch of nervous people,” said Jeff Comstock, a representative of Local 899 of the United Food and Commerce Workers, which covers the Simi Valley area.
19-Year Employee
At the 19-year-old Gemco in Granada Hills, an employee said: “I’ve been here 19 years next month. A lot of us older gals feel like we’re losing our home. You figure I spent most of my waking hours here.”
But she said she feels no animosity toward Lucky or the management. “I raised six kids working here. They’ve always been good to me. They must have had no other choice, or else they wouldn’t have done this.”
The woman, a clerical worker, said employees were told that they will be retained until Dec. 22, when a liquidation sale ends.
“Merry Christmas,” she said.
