SOUTH BEND — About 700 local people will lose their jobs on Feb. 8 when the A.J. Wright distribution center on South Bend’s west side is scheduled to close.
Parent company TJX Companies, based in Framingham, Mass., announced Friday it will shutter the A.J. Wright discount store division to focus on its more profitable retail brands like T.J. Maxx and Marshalls.
All 162 A.J. Wright retail stores, both A.J. Wright distribution centers, including a facility in Fall River, Mass., as well as the division headquarters and certain regional offices will close in February. After a several week conversion process, 91 A.J. Wright stores will reopen under other banners. Still, total 4,400 positions will be eliminated through these actions.
“A.J. Wright has had its ups and downs, and the results have been inconsistent,” said Sherry Lang, senior vice president of TJX global communications. “We want to grow the chains that have consistent good results.”
TJX Companies owns the 540,000-square-foot center that sits on the west edge of the Studebaker corridor. “We are not ready to comment regarding our plans for the distribution center property,” Lang said.
For the second time in less than a month, Mayor Stephen J. Luecke received a phone call from a west-side company leaving South Bend. In November, Robert Bosch Corp. said it will phase out its Bendix Drive operations by late 2011.
“They’re both terrible,” Luecke said at a Friday press conference about the announcements, which affected local employees ranging from full-time Bosch engineers to part-time hourly A.J. Wright workers charged with shipping and receiving.
“This is another instance of no advance notice. But they’re closing the whole A.J. Wright line so there was nothing the city could do to keep those jobs here,” Luecke said about A.J. Wright. “It’s the failure of retail that has caused the closing of this distribution center, and it’s a loss for the community and for families counting on those incomes."
The $41 million South Bend distribution center opened in early 2004 at the corner of Sample and Olive streets, after city and state officials courted TJX Companies to South Bend.
The city granted the company a $2.8 million, 10-year tax abatement that has four years remaining. TJX Companies has paid penalties totaling about $400,000 from missing stated job targets, Luecke said.
When it opened, the facility employed about 350 people. There were plans to add a second building on the 85-acre brownfield site and boost employment to 800. At that time, the company believed the lower-price A.J. Wright chain could reach 1,000 stores. But the chain reached its peak of only 162 stores in 2006, Lang said.
A.J. Wright employees, including those South Bend employees whose positions are being eliminated, will be compensated through the end of January or longer, company officials said. Lang could not comment on whether any local workers could transfer to other positions within the company.
TJX Companies operates two other distribution centers in Indiana, including an Evansville center that services the T.J. Maxx chain, and a Brownsburg center that supplies items to HomeGoods stores.
“If TJX is looking to sell or lease this building, there may be a couple of local companies that would look at expanding into it,” Luecke said. “But TJX may in fact want to mothball the facility for a period of time, because as retail picks back up again it may still fit into their distribution system.
“There are a lot of questions we don’t know the answers to yet,” he added.
Like Luecke, Jeff Rea, president and chief executive of the Chamber of Commerce of St. Joseph County, was completely taken off guard by Friday’s announcement. He said he believes even managers at A.J. Wright must have had little or no warning since they had talked with a Chamber representative within the past two weeks about renewing the company’s membership next year.
In addition, Rea said the Chamber assisted the local warehouse in the hiring of about 22 people in August. “All indications were that things were going well,” he said. “They always had their hiring sign out.”
Rea was quick to defend South Bend and the city administration against those who will want to put the finger of blame on someone. “This had nothing to do with South Bend. It was symptomatic of what was happening corporate-wide,” he said. “We all thought it (the distribution center) would be around for a long time.”
On the plus side, the warehouse that A.J. Wright owns should be easier to market than other vacant buildings because it is relatively new and wide open with high ceilings.
“It makes the building more of a blank slate and there’s quite a bit of land for possible expansion,” he said.
In fact, Rea said the Chamber already has received a couple of phone calls from those interested in the building. “A.J. Wright selected South Bend for a reason,” he said. “Those factors still hold true.”
Tribune staff writer Ed Semmler contributed to this story.
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