Woolworth Will Close 970 Stores, Trim 13,000 Jobs

Woolworth Corp., in a bid to develop more specialty stores and move further from its old-fashioned dime store image, on Wednesday said it will close about 970 stores and eliminate 13,000 jobs in North America.

The targeted stores represent one-tenth of the Woolworth retail empire in the United States and Canada. Of those stores, up to 250 will be transformed and reopened under more profitable formats.

Embarking on its second major restructuring in two years, the company said it will close money-losing Woolworth and Kinney shoe stores so it can allocate resources to more successful operations, such as its Foot Locker athletic shoes chain. In January, 1992, Woolworth announced it would close or sell 450 stores and revamp 450 others.

The New York-based retailer, which has 135 Woolworth and Kinney stores in California, was to announce today which stores will be closed. There is only one Woolworth in Orange County, a mini-sized Woolworth Express in Garden Grove. Kinney stores are situated at major malls in Costa Mesa, Brea, Huntington Beach, Santa Ana, Mission Viejo, Orange, Westminster and Laguna Hills.

Woolworth stock rose 25 cents Wednesday to $26.125 a share on the New York Stock Exchange.

The affected stores incurred $36 million in operating losses during the first half of 1993, the company said. Woolworth Chairman William K. Lavin cited those losses and a lackluster retail climate as factors in the company’s decision.

“The continuation of unfavorable economic conditions in the United States and Canada, along with increased competitive pressures affecting customers’ shopping habits and the generally depressed consumer-spending environment, have led us to accelerate our store closings,” Lavin said in a statement.

Industry analysts applauded the Woolworth plan.

“Variety stores are no longer viable,” said Kurt Barnard, a New York-based retail economist. “This is a step in the right direction. Variety stores are essentially convenience stores, but with the rise of discount store chains, which are more attractive and carry more merchandise, there isn’t a need for variety stores.”

“Wal-Mart and the warehouse clubs have taken their toll on Woolworth,” said Ed Johnson, an industry analyst at New York-based Johnson Redbook Service. “This is a smart move.”

Woolworth said it will eliminate about 10,000 jobs in the United States and 3,000 in Canada, or about 9% of the company’s work force. The layoffs are to be about evenly divided between full-time and part-time positions.

In the United States, about 730 stores--including about 400 Woolworth stores and 330 Kinney and Footquarters shoe stores--are scheduled to close. About 100 of those stores will be converted to clothing and drugstore operations.

Woolworth employees, awaiting word of which stores will be closed, expressed apprehension.

Joy Griffin, manager of the Woolworth Express in Garden Grove, said business is often slow and “there is so much competition” from the likes of J.J. Newberry, Pic ‘N’ Save and 99-cents Only stores. But Woolworth does have its loyal customers. “Especially the old ladies, they like Woolworth,” Griffin said.

“The company has to downsize because many stores aren’t profitable,” said Jim Gillespie, manager of a Woolworth store in Los Angeles. “It’s a shame that stores have to be closed because of the economy. Everyone in the chain has to feel that their job security is threatened.”

Soledad Lobos, a clerk at the store on Hollywood Boulevard, store, has worked for Woolworth 20 years but said she is unsure of her future.

“I’m concerned--but whatever happens, life goes on,” she said.

The retail operation was founded by Frank W. Woolworth in 1879 in Lancaster, Pa. The variety store operation grew rapidly over the decades, attracting shoppers to its variety of goods and downtown lunch crowds to the diners in its stores.

Many analysts say the slow decline of variety stores began in 1962, when the S.S. Kresge variety chain introduced Kmart. That same year, Dayton Hudson Corp. opened the first Target discount store and Sam Walton opened the first Wal-Mart.

Times staff writer Chris Woodyard contributed to this report.