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McCrory Chain to Shut Down 229 of Its Stores

From Reuters

In a sign of the troubles facing retailers this Christmas, McCrory Corp. is about to announce the closing of 229 of its 1,080 stores, a company source said Saturday.

McCrory operates stores under a variety of names, including McCrory, S. H. Kresge Co. and J. J. Newberry. Its stores offer low-priced merchandise, mostly in inner-city locations.

Other McCrory chains are McLellan, H. L. Green, T. G. & Y. and GC Murphy.

According to the source, a company announcement was distributed to employees Friday through the company’s electronic mail system. A public announcement was expected before Christmas.

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The company employs about 23,000 people, but the number of possible job cuts because of the closings was not disclosed, according to the source. The shutdowns are expected to be completed by the end of January.

No McCrory officials were available for comment Saturday. A security guard at the company headquarters in York, Pa., said no one would be in until Monday.

The cuts, described as “clearing out the deadwood” by the source, would be nationwide and would affect all of the department store chains operated by the company.

McCrory is owned by Meshulam Riklis, a flamboyant Beverly Hills investor who has a wide range of holdings. He is married to singer and actress Pia Zadora.

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The closings come amid an increasingly grim economic climate for retailers that the Christmas shopping season has done little to alleviate.

Retailers nationwide have been cutting prices to lure consumers, who surveys show are too worried about the future of their jobs to go on shopping sprees.

McCrory’s problems have been around for some time, analysts say. In the fiscal year ending Jan. 31, 1991, McCrory lost $44.4 million on sales of $1.52 billion.

During the first six months of 1991 the situation worsened, officials said, with the company losing $27.6 million on sales of $657 million.

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