Frederick & Nelson To Cut Jobs, Store
In moves that will eliminate 160 jobs in Washington and Oregon, Frederick & Nelson today announced it will sell its store in Portland and undertake a major management restructuring.
In exchange, the Seattle retail chain's principal lender, New York-based Citibank, agreed to extend F&N's line of credit into 1992.
F&N, for most of 1990, operated under a credit cloud from major credit rating organizations and some major suppliers. F&N was purchased in 1989 by Seattle real-estate developer David Sabey. Sabey has since sued former F&N owners, asking for his money back and alleging that they misled him about the financial condition of the stores.
The chain said today it has agreed to sell its lease at Washington Square mall in Portland to the mall's owner, Safeco Properties, for an undisclosed sum. F&N will close the 112,000-square-foot store, its only Oregon outlet, on Jan. 14.
F&N has been an anchor tenant at the southwest Portland mall for a decade, according to Washington Square manager Jack Reardon. Options attached to its lease could have let it remain a tenant for another 15 years.
``It was a mutual agreement,'' Reardon said. ``They couldn't come up with other stores down here in Oregon. It wasn't working out economically.''
The store's closure will throw approximately 100 people out of work. F&N said it will provide them salary and benefits for two months and help them find new jobs.
F&N also announced that it was undertaking a management reorganization that will eliminate 60 jobs, or roughly 2 percent of its workforce.
``A cornerstone of the company's turnaround strategy has been and continues to be the distribution of decision-making throughout the organization,'' the retailer said in a prepared statement. ``By moving decisions closer to the customer, we will be able to reduce our central administration and consolidate a number of jobs.''
F&N last week reduced its hours at suburban mall stores in Washington and began closing its downtown Seattle flagship store early.
The Portland closure fits into a yearlong pattern of cutbacks at F&N. Last year, Frederick & Nelson began closing its Red Tag Clearance Centers. The retailer had five of the stores at one point, but they tended to generated heavy losses, according to Dave Taylor, F&N president.
In 1990, the retailer also phased out its electronics department, an area Taylor said tended to produce big sales but also big losses. F&N said today it is negotiating with the management of Bellevue Square mall regarding renovation and expansion there and is planning on going ahead with plans to renovate its Aurora Village location.
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