NEW YORK — Saks Fifth Avenue has decided not to reopen its Woodland Hills unit in Los Angeles, which has been closed since last week’s earthquake.
There was no significant damage to the building’s structure. However, because ceilings, lighting and air-conditioning needed extensive repairs and much of the merchandise was ruined, the company concluded reopening would be too costly, according to Gary Witkin, vice chairman of Saks.
“It’s awful. We’re very sorry to add to the disruption of these people’s lives,” said Witkin, referring to the Saks employees. He was reached in Los Angeles on Wednesday, after touring the unit.
The Woodland Hills store had 130 employees. The company will offer them severance packages, extended medical benefits and career counseling and will try to place some workers at other Saks units or with other retailers.
The Woodland Hills store, with 120,000 square feet, including about 80,000 for selling, was not a key Saks unit in terms of sales or profits.
“It had achieved satisfactory results,” Witkin said. “It had an okay year.”
Asked if the store’s performance had something to do with not reopening it, Witkin said, “This is really an issue of it being hit by the earthquake and taking a look at what it would cost to pull it up by its bootstraps.”
He added, “After an extensive review of the damage, we determined it was not feasible to reopen.”
Witkin said the Woodland Hills unit had earthquake and business interruption insurance, but also a “significant” deductible.
Saks hopes its store in Beverly Hills will pick up some of the business the company loses by shutting Woodland Hills. The Beverly Hills store reopened a day after the Jan. 17 earthquake. Witkin noted that the store is planning to add 14,500 square feet, bringing it to 147,500 square feet. The expansion involves taking over an adjacent building occupied by small specialty stores, thereby giving Saks the whole block.
Meanwhile, Saks has created an employee disaster relief fund for associates of the Woodland Hills and Beverly Hills stores and is offering deferred credit payments and finance charge adjustments for customers affected by the earthquake.
Saks operates nine stores in the California market. There are no plans to close any more units, Witkin said.