FEDERATED TO SHUT A&S OFFICES IN BROOKLYN; 650 LAYOFFS PLANNED
NEW YORK--Federated Department Stores, in a major step toward merging its A&S/Jordan Marsh division with Macy's East, said Friday it will close the A&S/Jordan Marsh central office in Brooklyn and lay off 650 of the facility's 900 employees. The remaining 250 employees will be transferred to Macy's East headquarters in Herald Square beginning Jan. 20 and continuing through the end of the month. The layoffs, which will take place in four stages from March 10 through December, will affect all levels, from clerical workers to senior officers, said a spokesman here for the divisions. He declined to name any of the executives affected by the consolidation. To cover the costs of the layoffs and transfers, Federated will take a charge against fourth-quarter earnings, but the amount has not been determined, a spokeswoman in Federated's Cincinnati headquarters said Sunday. The cutbacks were expected since Federated announced its plans to merge the two divisions last year. The staff reductions should result in "substantial expense reductions," the spokesman said, but he declined to provide a specific amount. Federated officially merged with R.H. Macy & Co. just three weeks ago and pulled the company out of bankruptcy. By combining Macy's East and A&S and consolidating certain overlapping operations, Federated expects to trim about $50 million in expenses, beginning next year. A number of Macy's East executives already have opted for lucrative severance packages and left the company. Hal Kahn, chairman of Macy's East, said in a statement that though the central offices are moving, the Brooklyn A&S store on Fulton Street "will continue to provide a full range of merchandise and services to its customers and community," The Federated spokesman said the A&S unit has been "very successful" in the last few years. Federated is studying how it will use the office space in the store housing the division's former headquarters. For months, there's been speculation that Federated will phase out the A&S nameplate and replace it with Macy's. Asked to comment on the reports, the spokesman said, "It is under study. There haven't been any decisions made." The retailer also is considering the fate of certain A&S and Macy stores housed in the same malls. As reported, Federated has decided to close its A&S store in the Sunrise Mall on Long Island and convert the unit to Stern's. Also, the leases for an A&S store in Woodbridge, N.J., and the existing Stern's unit at Sunrise Mall were sold to Sears, Roebuck & Co. late last month.
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