Also This Week:
Defense Contractors Furlough 6,000 as Shutdown Drags On;
Having Shrunk in Numbers, Bank Branches Now Shrinking in Size;
Alcatel-Lucent Laying Off 2,100 in Americas; 10,000 Worldwide; and
The Latest New Property Availability Leads
Safeway has decided to exit the Chicago market. As part of the plan, the national grocery chain has already sold four of its Dominick's stores in the greater Chicago area to New Albertsons Inc., which operates Jewel-Osco grocery stores in the region.
Safeway has approximately 68 other stores in that market, all of which are also being put up for sale.
Share with Your Followers on Twitter
“Shortly after I assumed my role as CEO, we began a strategic assessment of our current business with the objective of improving how we allocate resources and develop and enhance growth strategy,” said Robert L. Edwards, CEO and president of Pleasanton, CA-based Safeway. “The scope of this initiative is broad, and we are focused on exploring a number of strategic initiatives for profitable growth and improving our core grocery retail business.”
The decision to exit the Chicago market is one of the initiatives stemming from that review process.
Safeway said the exit will generate a substantial tax loss that will help it offset some of the tax on the sale of its Canadian operations.
The company recently agreed to sell Canada Safeway Limited to Sobeys Inc. for $5.59 billion in cash. With the anticipated tax loss from the exit of the Chicago market, Safeway’s net after tax proceeds is expected to increase from $3.85 billion to a range of $4.24 billion to $4.33 billion. The transaction is still expected to close in the fourth quarter of 2013 and is subject to customary closing conditions and regulatory clearance.
Safeway has just begun the process of marketing its assets in Chicago, but said it has already received significant interest.
“We're working on that in earnest with a number of different parties, and so we're actually quite pleased with the interest that we're seeing,” Edwards said. “The objective will be to sell all or as many of the stores as we can, as quickly as we can.”
Edwards said that relative to its other markets, the Chicago grocery market is quite fragmented, diverse, with a number of independent competitors and an influx of new companies competing there.
“Our assets in Chicago are the lowest performing division that we have,” Edwards said.
Defense Contractors Furlough 6,000 as Shutdown Drags On
Add to the list of 450,000 federal government workers currently furloughed due to political monkeyshines going on in Washington, D.C. another 6,000 defense-related contractors who have been told to stay home until further notice.
URS Corp. in San Francisco had furloughed 3,000 employees as of Oct. 7 as a result of the federal government shutdown. If the shutdown continues, URS expects the number of affected employees to increase.
“The government shutdown, the continuing effects of sequestration, and uncertainty about the federal budget are all having negative impacts on URS and many other government contractors,” said H. Thomas Hicks, URS’ CFO. “We hope the situation is resolved as soon as possible to avoid additional impact on our federal business and our employees.”
Bethesda, MD-based Lockheed Martin also has furloughed at 3,000 as a result of the government shutdown. The number of employees affected is expected to increase weekly in the event of a prolonged shutdown.
"I'm disappointed that we must take these actions and we continue to encourage our lawmakers to come together to pass a funding bill that will end this shutdown," said Marillyn A. Hewson, Lockheed Martin CEO and president.
Having Shrunk in Numbers, Bank Branches Now Shrinking in Size
U.S. banks have trimmed the number of branches by more than 2,700 offices in the past five years and their bank branch costs are down by $1.67 billion. Still, the cost of owning and operating a branch has increased about $17,000 per year per branch in the same time frame.
Now two of the nations’ largest banks have found ways that could more dramatically shave those costs without sacrificing their retail reach. Bank of America recently launched a new generation of banking centers, known as “express banking centers," following a similar move earlier this year by Wells Fargo.
Express banking centers integrate more technology with fewer onsite associates than a full-service branch. Customers can perform the most common transactions using on site equipment. Associates are also on site to answer customers’ questions, open new accounts and guide them on convenient self-service banking options including online banking and mobile banking.
The new branch formats come in at approximately 1,000 square feet.
“Consumers empowered by online and mobile technology have been a driving force behind dramatic changes in banking, but they still value the personal attention when they walk into our banking centers,” said Rob Aulebach, retail distribution planning and execution executive. “Bank of America is paying close attention to the direction customers provide us, and we are committed to simplifying their banking experience with easy-to-use tools, technologies, products and services that can guide and inform their financial decisions.”
“With this new store concept, we’ll be able to offer person to person sales and service along with leading banking technology in settings that previously would have discouraged us from building a store,” said Jonathan Velline, head of Wells Fargo ATM Banking and Store Strategy. “Stores are central to our strategy of providing excellent service and meeting our customers’ financial needs. This new neighborhood bank concept complements our traditional stores to help us bring the Wells Fargo store experience to more customers.”
The first express banking center are being opened in major metros, notably New York, Washington, D.C., Boston, Charlotte.
Plans for expansion of the new concept next year will be based on customer feedback to the initial locations, the banks said.
Alcatel-Lucent Laying Off 2,100 in Americas; 10,000 Worldwide
Paris-based Alcatel-Lucent plans to reposition itself as a specialist in the next-generation technologies of IP networking, cloud and ultra-broadband access. The shift will focus R&D activities on future technologies while cutting R&D in legacy technologies by 60%.
Alcatel-Lucent is planning a net reduction 10,000 jobs worldwide by the end of 2015. All areas where Alcatel-Lucent operates will contribute to this effort, with the reduction of 4,100 positions in Europe, Middle East and Africa, 3,800 in Asia Pacific and 2,100 in Americas. By the end of 2015, Alcatel-Lucent will halve the number of its business hubs globally.
Facility Closures & Downsizings
|Company||Address||City||State||Closure or Layoff||No. of Layoffs||Impact Date|
|International Paper||16504 County Road 150||Courtland||AL||Closure||1,100||Immediately|
|Twin Pines||120 N Walston Bridge Road||Jasper||AL||Closure||60||Immediately|
|PHH Mortgage Corp.||5201 Gate Parkway||Jacksonville||FL||Unknown||365||Immediately|
|PSS World Medical||6500 Bowden Road||Jacksonville||FL||Unknown||124||Immediately|
|Prestress Engineering Co. LLC||2220 Route 176||Prairie Grove||IL||Closing||97||Immediately|
|The Arc of Northwest Indiana||479 lexington St.||Crown Point||IN||Closure||Unknown||Immediately|
|The Arc of Northwest Indiana||1553 W. 97th Place||Crown Point||IN||Closure||Unknown||Immediately|
|The Arc of Northwest Indiana||300 W. 53rd Ave.||Gary||IN||Closure||Unknown||Immediately|
|The Arc of Northwest Indiana||440 Knox||Gary||IN||Closure||Unknown||Immediately|
|The Arc of Northwest Indiana||2901 Beverly Drive||Gary||IN||Closure||Unknown||Immediately|
|The Arc of Northwest Indiana||120 Avenue C||Griffith||IN||Closure||Unknown||Immediately|
|The Arc of Northwest Indiana||1441 Woodlawn St.||Griffith||IN||Closure||Unknown||Immediately|
|The Arc of Northwest Indiana||7318 Arkansas||Hammond||IN||Closure||Unknown||Immediately|
|The Arc of Northwest Indiana||6511 Nebraska St.||Hammond||IN||Closure||Unknown||Immediately|
|The Arc of Northwest Indiana||19038 Mississippi St.||Hebron||IN||Closure||Unknown||Immediately|
|The Arc of Northwest Indiana||420 Crestwood Drive||Hobart||IN||Closure||Unknown||Immediately|
|The Arc of Northwest Indiana||1734 Jeffrey Dr.||Lowell||IN||Closure||Unknown||Immediately|
|The Arc of Northwest Indiana||1921 W. 54th Ave.||Merrillville||IN||Closure||Unknown||Immediately|
|The Arc of Northwest Indiana||336 W. 56th Ave.||Merrillville||IN||Closure||Unknown||Immediately|
|The Arc of Northwest Indiana||6101 Hayes St.||Merrillville||IN||Closure||Unknown||Immediately|
|The Arc of Northwest Indiana||6371 Vermont St.||Merrillville||IN||Closure||Unknown||Immediately|
|The Arc of Northwest Indiana||5777 Ellsworth Ct.||Merrillville||IN||Closure||Unknown||Immediately|
|The Arc of Northwest Indiana||6643 Fillmore St.||Merrillville||IN||Closure||Unknown||Immediately|
|The Arc of Northwest Indiana||2414 Woodlane Dr.||Merrillville||IN||Closure||Unknown||Immediately|
|The Arc of Northwest Indiana||5475 Stone Ave.||Portage||IN||Closure||Unknown||Immediately|
|The Arc of Northwest Indiana||3117 Woodbine||Portage||IN||Closure||Unknown||Immediately|
|Pathmark||4578 US Highway 9||Howell||NJ||Unknown||103||Immediately|
|Hilex Poly||41740 Shadden Road||Elyria||OH||Closure||48||Immediately|
|Chesapeake Energy||3575 Forest Lake Drive, Suite 400||Uniontown||OH||Unknown||60||Immediately|
|Grid One Solutions||4505 Middlebrook Pike||Knox||TN||Layoff||63||Immediately|
|Lee Regional Medical Center||127 Health Care Drive||Pennington Gap||VA||Layoff||137||Immediately|
|Fluor||6767 Forest Hill Ave.||Richmond||VA||Layoff||184||Immediately|
Keep up weekly on national news, trends and property leads with the Watch List Newsletter,
a weekly pdf that includes other news and leads not found on the CoStar Group web news pages. Sign up for the Watch List E-Mail Alert
. A new issue is published Monday mornings.
Hilco Real Estate: Six Former Lone Star Steakhouse Locations For Sale.