BUSINESS & ECONOMY

Retail Chains Close Struggling Stores

By Brenda Flanagan
Correspondent

“I love this store. And I had no idea. I’m so sad,” said Teri Degroat of Wantage.

Longtime customers like Degroat grieved. Their Macy’s at the Preakness Shopping Center in Wayne is among 68 closing nationwide. Despite a good overall holiday shopping season, some big box stores and retail chains like Macy’s, Sears and Kmart have hit a wall.

“I can’t believe all these Macy’s are going out. It’s just very upsetting to hear it,” said Charney DeMatteo of White House Station.

Degroat said, “It’s a pillar of Jersey, with all the Macy’s that are here.”

But there’ll be three less in Jersey this year, including the Preakness store. “…We continue to experience declining traffic in our stores where the majority of our business is still transacted,” Macy’s CEO Terry Lundgren explained.

“I think a lot more people are buying online. Because I bought a lot of things online and then you can actually return it to the store,” DeMatteo said.

Macy’s consolidation could save a half-billion dollars, but cost 6,200 jobs at stores nationwide — we don’t know how many in New Jersey, which still lags the country in economic recovery. And it hurts Wayne’s tax base — where Mayor Chris Vergano in his website letter cited a priority: “to increase our business population in an effort to create a more equitable distribution of the tax burden between residential and commercial properties.”

“We don’t want a ghost town in Wayne. The people pay too much money in taxes,” said Peggy Boscarino.

The problem confronts East Brunswick, too, where a Kmart on Route 18’s slated to shutter. It’s one of four closing in New Jersey this year — all among some 150 Kmart and Sears stores set to fold across the country — 3,900 jobs lost.

“We are taking strong, decisive actions today to stabilize the company and improve our financial flexibility in what remains a challenging retail environment,” said Sears Holdings CEO Edward Lampert.

East Brunswick reacted, by declaring that troubled retail area along the Route 18 corridor a redevelopment area for struggling store owners.

“To try to redevelop their properties into things that are more sustainable in the market that we have today, whether that means re-purposing retail space into something different,” said Dr. Brad Cohen, the mayor of East Brunswick. “All of that’s on the table.”

Meanwhile, The Limited‘s closing all its storefronts — five in New Jersey — and will do online sales only. Analysts say consumers empowered by online shopping choices helped push all of these brick-and-mortar stores into closure.

“I think today with the current competitive challenges that are out there, and the addition of the digital commerce business, I think there is less tolerance for companies to have a portfolio that has stores in it that are under-performing,” said Shelley Kohan, vice president of retail consulting with RetailNext.

Back at Macy’s in Wayne, shoppers took advantage of the inventory sell-off and commiserated with sales clerks.

“You know, I was talking to a woman in there, and she’s like, ‘You know, we’re a really good store.’ And that made me feel bad. Because that’s what I thought of, her losing her job,” said Nicolette Montazem of Hawthorne.

Towns will try to redevelop these properties, but for people laid off from jobs at brick-and-mortar retail stores, it could be tough to find another position.