November 7, 1990

430 jobs cut after Towers deal
BY KENNETH KIDD Retailing Reporter
Globe & Mail Nov. 7, 1990): Business News: pB1. Document Type: Brief article

The takeover of the Towers department store chain by rival Zellers Inc. will cost at least 430 people their jobs.

Zellers, a Montreal-based unit of Hudson's Bay Co., said yesterday that it plans to close the Towers merchandising and administration offices in Toronto and Montreal.

Layoff notices have gone out to about 375 workers in Toronto and 55 in Montreal. The layoffs are effective Feb. 9.

In a deal that closed earlier this week, Toronto-based Hudson's Bay paid an estimated $150-million for the 51 Towers stores run by Oshawa Group Ltd., also of Toronto.

Until February, workers to be laid off will get first crack at any comparable job openings elsewhere in the Hudson's Bay empire, which includes the Bay and Simpsons department store chains.

But Hudson's Bay spokesman Rolph Huband said that only "a fairly small number" of such openings would arise.

Zellers did not release severance terms, the one-time costs of the layoffs, or the annual wage and salary savings for Zellers. The Towers head office properties are leased.

Further layoffs are also likely as a result of the takeover.

As many as 10 Towers stores are located close to existing Zellers outlets, meaning that one or the other will have to be closed. "That won't be resolved for some months," Mr. Huband said.

As with Zellers, there are virtually no unions in the Towers operation. Only two Quebec stores are unionized.

Zellers yesterday told the remaining 5,800 Towers employees that the Towers stores, called Bonimart in Quebec, will continue operating under those banners in the short term. Most of the outlets will be converted to the Zellers format in 1991 and store employees will be offered continuing employment with Zellers.

Before the Towers takeover, Zellers had 216 outlets across Canada. There are 35 Towers stores in Ontario, 10 in Quebec and six in the Maritimes.

The Towers distribution centre in Mississauga was not included in the takeover. Oshawa Group, a major grocery wholesaler, has retained both the property and the workers for its own operations. An Oshawa Group spokesman would not comment on the layoffs announced by Zellers.

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