May to close 34 stores to trim costs

ST. LOUIS (AP) — May Department Stores Co. said yesterday that it will close 32 of its Lord & Taylor stores in 15 states and two other stores under different names, leaving about 3,700 workers jobless.

The targeted stores — representing 38 percent of Lord & Taylor’s sites and 19 percent of the company’s sales — are in markets where Lord & Taylor lacked a major presence and generally had a small number of stores, the retailer said.

The St. Louis company, pushing to focus on its core markets, will keep 54 Lord & Taylor stores in 11 states and the District of Columbia.

May also plans to close a Famous-Barr store in Des Moines, Iowa, and a Jones Store site in Omaha, Neb.

The nearest store to Washington being closed is the Lord & Taylor in White Marsh, Md., northeast of Baltimore.

The company said it will take a charge of about $380 million, of which about $320 million — or 70 cents per share — will be recorded in this second quarter ending Saturday.

May said it expects the closures to produce annual savings of about $50 million, or 10 cents per share, of which $20 million will be realized in the second half of this year.

In May, the company said its first-quarter earnings rose $2 million, though sales during that period dropped to $2.87 billion from $3.10 billion a year ago.

“In evaluating our long-term strategic objectives, it is clear that Lord & Taylor’s customers and May’s are best served by concentrating our efforts and resources on those markets with strong performances,” said Jane Elfers, president and chief executive of May’s Lord & Taylor division.

Dates for the closings have not been decided, May spokeswoman Sharon Bateman said.

While calling the related charges “obviously a negative,” analyst Jeff Stinson of FTN Midwest Research said the closings “long term should be a net positive for the company.”

“Any time you see a retailer taking a proactive step to shut down underperforming locations, it’s a plus,” Mr. Stinson said. “Too many retailers hold on to underperforming assets too long.”