Mervyns to outsource distribution center ops
Hayward-based retailer Mervyns said Friday it plans to outsource its distribution center operations at two California locations, eliminating more than 300 jobs in the process.
The 175-store chain is turning the Central Valley-area Fremont facility and Inland Empire Ontario facility over to third-party vendors in a move the retailer claims will reduce costs by $4 million per year.
Employees at the Fremont and Ontario DCs were notified Thursday of the layoffs. Workers will be paid through June 9, in accordance with state labor laws, and Mervyn's officials told workers that all affected employees could reapply for their jobs with the new outside vendors. Mervyns did not identify the third-party vendors.
The move is only the most recent effort by the firm to reduce expenses and increase profitability. In January, Mervyn's reduced staffing at the 600,000-square-foot Fremont DC to about 100 workers, eliminating 82 jobs. At the same time, 50 positions were cut at the 650,000-square-foot Ontario facility, leaving about 200 workers at the facility.
'Since we became an independent company, Mervyns has had to make some difficult decisions due to the economic realities of our business,' John Serino, executive vice president of operations for Mervyns told the Contra Costa Times. 'This is a big step we needed to take to improve our profitability.'
Since being purchased by the private equity firms Cerberus Capital Management and Sun Capital Partners in 2004, the firm has shuttered 80 stores and consolidated its remaining operations into its core California and Southwest markets.
Mervyns to outsource distribution center ops
