Leedmark, USAir to trim 473 jobs

NEW LAYOFFS JOLT MARYLAND

BG&E plans cuts

November 02, 1993|By Kim Clark and Suzanne Wooton | Kim Clark and Suzanne Wooton,Staff Writers Staff writer Ted Shelsby contributed to this article.

The Sun incorrectly stated yesterday the extent of the USAir customer service job cuts at Baltimore-Washington International Airport compared to other airports.

In fact, the number of layoffs among full-time employees at other hubs, such as Pittsburgh, Philadelphia and Charlotte, N.C., will be much greater.

The Sun regrets the error.

Maryland's economy, struggling to regain its footing, slipped back a step yesterday as two large employers announced they were eliminating a total of 473 jobs and a third set the stage for layoffs later this year.

FOR THE RECORD - CORRECTION

Leedmark, the struggling Glen Burnie "hypermarket" that sells everything from asparagus to cubic zirconium earrings, said it would shut down by Jan. 15, throwing 297 people out of work.

And financially troubled USAir Group Inc. said it would cut 176 customer service agents at BWI Airport as part of the airline's previously announced plans to erase 2,500 jobs nationwide.

In addition, Baltimore Gas and Electric Co., long one of the most stable employers in the region, reported it is preparing for the first layoffs in its 177-year history. In August, the utility had announced it would reduce its work force as a part of a $46 million cost-cutting campaign.

Worse, yesterday's bad economic news will likely send further layoffs and closures rippling through the economy.

Carlos Vasiliades, president of the Slice of Italy restaurant in the minimall connected to the Leedmark store, said that if another retailer doesn't take over the huge store (the size of six football fields), he would "go broke." He gestured down the hallway in front of the store's interior entrance to a dozen other businesses -- ranging from a shoe repair shop to a travel agency -- "This will be a ghost town," Mr. Vasiliades warned.

The silver lining in yesterday's news, economists said, was that

the layoffs were not primarily the result of a fundamental problem with Maryland's economy.

Instead, they were mostly the result of problems unique to each business -- from customers' dislike of too-big stores to airline price wars and new competition among power generators, said Mike Conte, an economics professor at the University of Baltimore.

For example, while Leedmark blamed a poor economy, Dr. Conte said other Maryland retailers reported an upturn in sales in August and September.

A combination of bad luck and geography have conspired to keep Baltimore and Maryland mired in a job recession, Dr. Conte said.

In August, the last month for which statistics were available, the national unemployment rate fell slightly, while Maryland's jobless rate worsened, and, for the first time in at least 10 years, the state's unemployment rate was higher than the national average.

And, the state reported, Maryland had 61,500 fewer jobs than it did last August.

While he expects the Maryland economy to follow that of the nation back to improved health next year, "the statistics are rather grim for Maryland" right now, Dr. Conte said. "And a lot of the [economy's] downward spiral seems concentrated in Baltimore."

In Glen Burnie, the mood was grim yesterday as Leedmark announced it was giving up its 30-month-old attempt to bring the European-style "hypermarket" to the United States.

Leedmark, owned by the French retailing giant Leclerc Group, said that sales of clothes and other nonfood items at its only U.S. store had been falling steadily, and that the company could no longer afford to sustain its "very significant losses."

"Leedmark does not have enough income to meet expenses," said company spokesman Edward Segal. "There is no knight in shining armor in sight to rescue the store, and we cannot delay the inevitable."

Thirty-six top Leedmark managers were laid off yesterday. An additional 122 employees will be laid off by Friday.

The company will not order any more items, and a skeleton crew will run the store until it closes on Jan. 15. Remaining merchandise will be liquidated. Leedmark will not file for bankruptcy, Mr. Segal said.

Retail analysts said the closure, following on the heels of another French company's September shuttering of two hypermarkets in the Philadelphia area, demonstrates that Americans don't like the idea of throwing blouses in the same shopping cart as bananas.

"There was too much competition, they were far too big, and their pricing wasn't that great," said Ed Comeau, a retail analyst for Lehman Bros. in New York.

Store has 85,000 items

For example, he said, Leedmark carried about 85,000 different items, while other popular discount stores, such as Price Club, carry 3,000 or so. And Leedmark's entire operation covered about 275,000 square feet, twice the size of a Wal-Mart.

But Leedmark workers said there was more than a bad idea to blame for the store's failure.

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