McCrory's plans to expand in area 2 stores closed in 'streamlining'

March 21, 1991|By Kevin Thomas | Kevin Thomas,Evening Sun Staff

McCrory Stores Chairman and Chief Executive Officer J. Philip Lux says his company considers Baltimore an "expansion market" despite the fact that the variety retailer is going to close two area stores this year as part of a nationwide streamlining campaign.

Close-out preparations began this week at the McCrory's in the 5400 block of Harford Road in Baltimore, as well as at the G.C. Murphy store in the 5700 block of Baltimore National Pike in Baltimore County.

Both stores are part of the McCrory Stores chain of 1,200 locations in the United States.

Lux said the two local stores are being closed because of poor performance. As part of its efforts to streamline, McCrory Stores plans to close 91 of its operations nationwide this year.

In the Baltimore area, the streamlining will affect only the two stores already slated for closing, company officials said. Employees at both stores, who number about 26, are being offered transfers to other area McCrory and G.C. Murphy operations. There are 25 McCrory and G.C. Murphy stores in Baltimore and its surrounding counties.

Lux said his company considers Baltimore a "very strong" market. "We look at Baltimore as an expansion market," he said.

The expansion comment was a reference to nine area G.C. Murphy stores, which McCrory acquired in 1989 through its parent corporation, E-II Holdings Corp. They continue to operate under the G.C. Murphy name. Six area Princess Stores were acquired in 1988. All were converted to McCrory stores by April 1989.

Also, McCrory is currently looking for additional locations for expansion in the Baltimore area, but officials said that no new stores are scheduled to open this year.

The G.C. Murphy store being closed has been a fixture of Westview Mall since 1958, said Howard Porter, manager. He said the store employs 16 people.

"I feel bad about the closing," Porter said. "The employees feel bad too. And I've had people all day come up to me and say they feel sorry about it."

Lux predicted that the streamlining will help McCrory achieve a 50 percent increase in pre-tax profits this fiscal year, which ends Jan. 31, 1992.

In fiscal 1989, the chain suffered a $2 million pre-tax loss on $1.34 billion in sales, but rebounded in 1990, earning $44 million in pre-tax profits on $1.48 billion in sales.

McCrory Stores is part of the complex empire of Meshulam Riklis. Despite the positive balance sheet for McCrory Stores, another Riklis holding, McCrory Parent Corp., earlier this year failed to make the interest payment on approximately $140 million in sinking-fund subordinated debentures.

But, because of a complicated restructuring by Riklis, it appears McCrory Stores will be unaffected by the default.

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