More than 2,700 Marylanders will lose their jobs in the coming months as cash-strapped Wards goes out of business, signaling essentially a retail shakeout across the state.
The Chicago retailer, which filed for Chapter 11 bankruptcy protection in December, will close 16 stores in Maryland. That will amount to 2,731 workers losing their lobs starting in mid-March, according to a statement filed with the Maryland Department of Labor, Licensing and Regulation.
"What that basically says is that on or about March 13 is when the associates will begin to be laid off, and it will continue through the winding down of the stores," said Joyce Pemberton, a spokeswoman for Wards.
Wards, owned by a division of General Electric Co. and formerly known as Montgomery Ward, is closing its 250 stores and 10 distribution centers, which employ 28,000 workers, around the country. Pemberton said it would take about three months from now for the stores to close. None had closed as of yesterday.
"What we are seeing is the new push out the old, and in some cases that means stores like Caldor, Montgomery Ward, Hess Shoes and others become part of history." said Anirban Basu, chief economist for RESI Research & Consulting, the economic forecasting arm of Towson University.
About another 200 local workers were displaced When Sears, Roebuck and Co. closed its store in Owing Mills Town Center late last month. Some of those workers were given jobs in other Sears stores, said Peggy Palter, a company spokeswoman.
The retail closings across the state are part of an industry shakeout, Basu said.
Over the last several years, retail has expanded and big chains, such as Target and Best Buy, have aggressively entered the market. Now, the market is saturated, so the older stores are being squeezed out.
"This is short-term pain, and often short-term pain is associated with long-term gain," Basu said.
Down the road, more attractive retailers could take the place of Wards. And property managers already are saying they will have little trouble finding tenants for Wards' buildings, said Basu.
"Our real estate department right now is working with that, and everything we own is up for sale," said Pemberton, the Wards spokeswoman.
While nearly 3,000 Maryland workers are being affected by both the Sears and Wards closings, the lost jobs are not the kind that have driven the state's economy.
But the impact will be felt as spending power weakens and consumer confidence is lowered, Basu said.
And for those losing their jobs, the layoffs come at a time when the economy is turning and employers are more reluctant to add employees because their bottom line is increasingly uncertain, Basu said.
Pemberton said Wards, has received calls from other retailers seeking Information about how to employ its workers. The company is also hoping to hold job fairs in its major markets, including Maryland.
One worker at the Wards in Bel Air, who asked not to be identified, has already found a new job. That worker said employees didn't see the closings coming and hadn't been told when their store would close.
"We're just biding our time and seeing what happens," the worker said.
Basu predicts that despite a slow, period for the first half of the year, the economy will pick up and it'll be easier for the retail workers who lost their jobs to find new ones.
"It will be more difficult now than it would have been a year ago and then it will be six months," he said.