From the archives: Caldor closes, 3,000 in area lose jobs

This story was originally published in Newsday on January 23, 1999

The going-out-of-business sales will start within weeks, but already, other major retailers are checking out Caldor stores to see if they're suitable to be made into Targets, Wal-Marts, K marts or others.

On Friday, Caldor Corp., the nation's fourth-largest discounter, said it would close all 145 stores, including 20 on Long Island and in Queens, after struggling with three years of bankruptcy reorganization and huge debts.

Company officials said the shutdown will occur by mid-May, and leave 20,000 employees - including some 3,000 in the area - out of work.

The liquidation comes after some creditors refused to give Caldor more time on a turnaround strategy that focused on remodeling stores and selling better-quality products at "everyday low prices." The creditors reportedly demanded immediate payment.

"Our associates have worked extremely hard in an effort to reposition and strengthen the company," said Caldor Chief Executive Warren Feldberg. But a "shortfall to our performance goals" and creditor opposition led the board to decide on liquidation.

Caldor's demise gives discounters such as Wal-Mart Stores, Target Stores, K mart Corp. and Kohl's Corp. the opportunity to expand quickly in the Northeast and on Long Island, where Caldor has been the market leader for years.

Caldor was the region's most-visited discounter in 1997, according to Scarborough Research Corp.

On Friday, spokeswomen for Wal-Mart and K mart declined to comment. But several years ago, Wal-Mart purchased a new, unopened Caldor in Uniondale for its first store in Nassau County and said they want to open 19 more on Long Island.

"K mart's looking at them. We've got home improvement retailer Lowe's looking at a number of them," said retail real estate specialist Stan Schuckman of Woodbury-based Schuckman Realty.

Target, which entered the area last year with four stores on Long Island and one in Queens, continues to look for new sites and plans to open in Setauket in July.

Caldor operates in nine states along the Eastern seaboard from New England to Washington. Its liquidation "creates opportunities for people like K mart, people like Target and Wal-Mart to move into those markets," said L. Wayne Hood, a stock analyst who follows retailers for Prudential Securities.

Joseph Ronning of Brown Brothers Harriman, agreed, saying "a lot of their (Caldor's) locations are quite desirable," especially those that are 100,000 square feet or more - the size most major discounters seek.

Caldor began nearly 50 years ago as a small store selling gifts and cameras in upstate Port Chester. Founders Carl and Dorothy Bennett combined their first names to form the store's moniker. In the mid-1960s, they expanded by selling other merchandise and opening stores in New England.

In 1981, the Bennets sold Caldor to Associated Dry Goods Corp., which more than doubled the number of stores before merging with May Department Store Co. Seven years ago, Caldor was spun off as an independent company with stock traded on the New York Stock Exchange until it was delisted last year.

Most analysts had expected Caldor to shut down since it stopped paying suppliers Jan. 8 and continued negotiating with creditors, some of whom said they preferred liquidation to reorganization. "Once you lose the creditors and stop the flow of goods, you're a goner," said Eric M. Beder, an analyst with HD Brous & Co. in Great Neck. Caldor, with annual sales of $ 2.5 billion, owes creditors about $ 1 billion.

But Caldor customers and employees were upset to learn of the closings.

"The management is acting like they don't care," said Kamilah McNeil of Huntington, who works at the Caldor in Melville. She said she heard Friday morning that she could be out of a job in three weeks. "I feel bad for the people it's going to hurt."

Louise Green of Baldwin frequently shops Caldor. "I'm sad that it's closing because it's got great bargains," she said. "Every time we find good stores that are reasonable with good quality merchandise, they close up on us."

The closings will, no doubt, affect the surrounding communities, but they will also affect adjacent retailers.

"My belief is that its going to affect us in a positive manner," said Edmon Braithwaite, a manager of Odd Job in Melville. "We used to be a second choice, maybe now we'll be the first."

On Friday, about 620 people were let go at Caldor headquarters in Norwalk, Conn., and 350 at its New Jersey warehouse, sources said.

The United Food and Commercial Workers union, which represents Caldor store and warehouse employees, pledged to help them file for unemployment checks and find new work. Membership meetings will be held soon, said Al Guglielmo, president of Local 888, which represents 4,500 Caldor workers in New York and Connecticut.

He said, "This is a nightmare because there aren't the jobs out there that provide the same pay and benefits. We bent over backwards to help the company but I guess it just wasn't enough."

Staff writers Elio Evangelista, Katia Hetter, Vickie Elmer and Alan Wax contributed to this story.