plus 1, TJX Cos. cutting 1,400 jobs in Mass. - Boston Globe

TJX Cos. cutting 1,400 jobs in Mass. - Boston Globe

Posted: 11 Dec 2010 07:28 AM PST

Framingham discounter TJX Cos. is shuttering its A.J. Wright chain, a move that will slash roughly 1,400 jobs across the state and take its biggest toll on Fall River, where 800 positions will be eliminated at a distribution center by early next year.

Closing A.J. Wright — a 162-store clothing chain aimed at blue collar shoppers — is a huge blow to the south coastal city, already battling one of the highest unemployment rates in Massachusetts. This will be the biggest job loss for Fall River since Quaker Fabric laid off about 900 employees three years ago.

City officials, who said they are furious that TJX executives did not offer any warning, disclosed plans to revoke a tax break agreement for A.J. Wright with several years remaining in the deal.

"This is devastating news for the city of Fall River, which already has an unemployment rate of 13 percent or above,'' said Mayor William A. Flanagan of Fall River. "To make this announcement two weeks before Christmas is disturbing.''

Ambulances took away multiple workers who collapsed or complained of chest pains yesterday after learning about the plant closure, according to several employees and Flanagan.

"I don't understand why they are doing this,'' said Jose Arroyo, 43, who has worked at the distribution center for seven years.

The Fall River resident, who supports his wife and two children, said he is worried about bleak job prospects, especially with 800 more people out of work in the area. "The economy is not great right now,'' said Arroyo, chief steward of Local 301, which represents the plant employees, who typically earn between $8 and $12 an hour.

TJX chief executive Carol Meyrowitz said in a statement: "Any business decision that involves the elimination of jobs, even if right for the company as a whole, is extremely difficult. This decision, which was reached after a great deal of careful thought and consideration, was no exception. I am deeply grateful to those distribution center associates affected by this action for their hard work and dedication and know this is a difficult time for them.''

The retailer will pay affected employees through the holidays and seek to provide workers with "enhanced severance and other assistance'' but declined to disclose details.

Iris Torres, 61, said she was surprised by the news, especially after labor leaders met with A.J. Wright executives last week who told them the chain was doing well and had plans to open 10 more stores. Torres, who has worked at the plant for more than seven years, said she is concerned about starting over.

"I am worried about the future,'' Torres said. "I am not ready to retire. I need the money to pay for my car, my mortgage.''

Joanne F. Goldstein, state secretary of Labor and Workforce Development, said Massachusetts officials were surprised by the announcement.

"We are very concerned TJX has taken this action,'' she said. "We recognize for employees this is a very tough time of year for this to happen.''

Across the country, TJX intends to convert 91 A.J. Wright shops into T.J. Maxx, Marshalls, or HomeGoods stores. The company will close the remaining 71 shops, including 10 locally, and eliminate two distribution centers by early February. These changes will result in 4,400 job losses nationwide. In Massachusetts, the company will cut about 175 positions at the corporate headquarters in Framingham, 800 distribution workers in Fall River, and 400 store employees.

A.J. Wright stores slated for closure between late January and the middle of February include those in Fitchburg, Malden, Medford, Methuen, New Bedford, Quincy, Somerville, Springfield, Waltham, and Worcester at Perkins Farms Plaza.

Investors and retail analysts were less surprised by TJX's plans to eliminate the chain. A.J. Wright, founded in 1998, turned its first profit in 2008 and the performance has remained inconsistent, according to Daniel Hofkin, an analyst with William Blair & Co. When TJX reported earnings last month, it said that third-quarter sales at A.J. Wright stores open at least a year, or same-store sales, were down 2 percent. For the same period, same-store sales at T.J. Maxx and Marshalls rose 1 percent, and same-store sales at HomeGoods were up 3 percent, TJX said.

"This is the right decision for the company. A.J. Wright was not as clearly defined as a concept in terms of why it needed to stand on its own,'' Hofkin said.

In its early years, A.J. Wright struggled to find its consumer base, targeting too narrowly to urban fashion. More recently, the company sought to differentiate the chain from other discounters by featuring a broader mix of merchandise that appealed to a wider audience, including career wear, plus sizes, children's, and family footwear. The brand, which has smaller stores with cheaper goods compared to T.J. Maxx and Marshalls, also attempted to market more toward Hispanic shoppers.

TJX's Meyrowitz said in a statement: "A critical factor in this decision is that, over the past two years, we have learned how to serve the A.J. Wright customer with our T.J. Maxx and Marshalls banners and have seen very strong performance from these stores in demographic markets similar to those in which we have A.J. Wright stores.''

But some consumers say the other chains do not meet their needs.

"My heart is broken,'' Helen Falleti said about the planned closure of the store in her Quincy neighborhood. "I don't know what I am going to do without it. It's my favorite store.''

Falleti, unemployed for the first time in 20 years, is able to buy Christmas gifts at the discount store prices.

"I can afford to walk in this store. I can't afford to walk in T.J. Maxx, unless I get something from clearance,'' Falleti said.

Mary Jones, 62, of Mattapan, agrees, and said she plans to shop at Kmart after A.J. Wright shuts down.

"This is really sad. It is economical for the people in the community that don't have a good income,'' Jones said of A.J. Wright. "They can still come out and look good and feel good.''

Globe correspondents Gal Tziperman Lotan and Alexa McMahon contributed to this report. Jenn Abelson can be reached at abelson@globe.com; Chris Reidy can be reached at reidy@globe.com.

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Job growth a work in progress - Boston Globe

Posted: 11 Dec 2010 07:20 AM PST

The job picture is brightening, but slowly. Every community in the region has seen improvement from a year ago, but the overall unemployment rate is still relatively high, according to state numbers.

Deborah Hunter Jones of Weston is one of the fortunate ones.

After getting laid off from her banking job in January 2009, she realized her hard times might be a business opportunity in disguise. She has since opened her own business, Create Balance Massage Therapy, in Newton.

"I knew at some point in my life I wanted to work for myself, and I knew I wanted it to be something I was absolutely passionate about,'' she said, pointing to her focus on health and wellness. "It was a huge risk, since I was unemployed, but it was something I always wanted to do.''

While the unemployment picture has improved, the gains have been modest, and the unemployment rate is nowhere close to matching its most recent low in 2008.

Still, a survey of 53 area communities found that all of them saw their job pictures brighten from October 2009 to October of this year, even if it was only a fractional improvement in many towns.

Three communities — Harvard, Berlin, and Medway — saw their jobless rate improve by 2 percentage points or more over the past year. Lincoln has the region's lowest unemployment rate, 4.2 percent.

And the local communities were far ahead of the statewide figure; the state's unemployment rate for October was 8.1 percent, compared with 5.8 percent in this region. (The state rate is seasonally adjusted, while the local rate is not.) The state rate in March 2008 was 4.5 percent, its recent low.

Many of the unemployed, like Hunter Jones, are turning to one of the state's 37 career centers for help. The centers, which receive state and federal funding, can help people file for unemployment, get retraining, or seek counseling, among other services. Their offerings are tied to the local area's needs.

Over the better part of a year, Hunter Jones met one-on-one with a career counselor, at first once a week and later twice a week. The counselor helped her get a $10,000 federal grant to help pay the $12,000 tuition for the Cortiva Institute in Watertown, which has an intensive program in massage therapy.

She said the counseling helped her focus on defining and articulating what she wanted to do in massage, and helped her structure her business.

After Kenneth Buonomo lost his job with Fidelity Investments in Marlborough in February 2009, he also decided he needed more training to get hired again. He visited the Norwood job center, which was able to help him get a $10,000 grant that paid for training to make him a certified Microsoft systems engineer.

With certificate in hand, the 54-year-old father of two from Somerville landed a computer position with Partners Healthcare. The pay is a lot less than his job at Fidelity, Buonomo said, but that is more a function of the industry than where he works. "I really felt the certification helped me, not just because of the letters after my name, but it gave me additional knowledge,'' he said.

A spokeswoman for Governor Deval Patrick, Kofi Jones, said the state's strengths are responsible for its unemployment rate being 1.5 points better than the nation's 9.6 percent in October. "What sets us apart and what continues to assist us, even during the recent challenges, are our schools, people, businesses, and ingenuity, which are second to none,'' Jones said.

Local economists see a long, slow — and uncertain — recovery ahead. However, Massachusetts has advantages many other areas of the country lack, such as a vibrant educational system, which continually graduates smart entrepreneurial people, robust medical and biomedical fields, and a strong finances sector.

Harold Petersen, a professor in the economics department at Boston College, said the slowdown is due partly to people's increased savings, rather than spending. The stock market crash and lackluster growth in home real estate prices have translated into more cautious consumers, Petersen said.

He regrets what he sees as a missed opportunity to use more stimulus money to repair the nation's crumbling infrastructure, which would also have employed more construction workers.

Matt Carroll can be reached at mcarroll@globe.com.