Many of the 88 employees of Home Depot in Frankfort will be looking for new jobs soon.
Early Thursday morning Home Depot's district manager and the human resources team told the local employees that the Frankfort store would be closing in about seven weeks.
"It was a very difficult decision," said Ron DeFeo, spokesman for the Atlanta-based company. "We will offer jobs to the management team to relocate and we will work to replace as many associates as we can.
"For those who we can't do that or are not interested in that, they will get paid for 60 days from their last day of employment. All associates will be eligible for the August bonus payout, and there will be additional eligibility severance pay, based on tenure."
The Frankfort Home Depot " at 1001 Vandalay Drive in the West Ridge shopping center " is one of 15 underperforming stores that will be closing in the next two months, affecting 1,300 employees.
The company announced a nearly 30 percent drop in first quarter profits.
"Closing a store is always a difficult decision because it affects both our people and our communities," CEO Frank Blake said in a news release. "But, as with our decision to slow future store growth, this is the right decision and will bring long-term benefits to our associates and to our shareholders."
Other stores closing include branches in East Fort Wayne, Ind., Marion, Ind., Opelousas, La., Cottage Grove, Minn., East Brunswick, N.J., Saddle Brook, N.J., Rome, N.Y., Bismarck, N.D., Findlay, Ohio, Lima, Ohio, Brattleboro, Vt., Beaver Dam, Wis., Fond du Lac, Wis. and North West Milwaukee, Wis.
"After reviewing financial returns for every store in the company, there were 15 stores not meeting the company's targeted return," said DeFeo. "We looked at return on invested capital; how much cash flow each store was generating; the net present value in each operation vs. the net present value of exiting, and other things."
The 95,000 square-foot store in Frankfort, on 16.2 acres, opened in 2003.
Frankfort attorney Charlie Jones, who worked with the developer to open the Home Depot, said he thinks the store would have been more successful "if we had been able to move a little more quickly on the zone change on property behind it.
"If the Noel farm had been developed and there had been houses around it, that would have brought more traffic. Someday, what's on that site will be successful when the Noel farm does develop. But it may be a few years, given the economy and expected growth in Franklin County."
Jones represented the Noel farm developers who worked out an agreement with the City Commission on traffic and storm water plans, among other items, for the 241-acre tract. The Frankfort/Franklin County Planning Commission had voted 4-3 to rezone the property in favor of development, but the city commissioners later rejected it 3-2. The two sides then worked out an agreement.
Mayor Bill May said, "The thing that bothers me is that we're going to have another empty box. I hope we can find someone to occupy that space as soon as possible and find all their employees other jobs.
"It is a shame really. That's one of the first places (people) see when they come to the community. Hopefully our chamber of commerce and economic development folks can recruit someone to fill that spot. My number one concern is thinking about families facing a loss of jobs."
May said he is not too worried about loss in occupational taxes from The Home Depot employees. He said they would probably find other jobs in Franklin County.
Carmen Inman, executive director of the Frankfort Area Chamber of Commerce, said the closing announcement surprised her.
"I had heard they were going to be cutting back on staff, but it did surprise me to hear they were completely closing down," Inman said. "It's going to be a loss to our community. They had really stepped up their community involvement and that's going to be missed."
DeFeo said the nearest Home Depot to Frankfort is in Lexington. There are 15 stores in Kentucky with several in Louisville, 1,970 stores in the U.S. and 2,258 overall, he said.
The company reiterated its intention to open 55 new stores in the 2009 fiscal year, though it will no longer pursue the opening of roughly 50 U.S. stores that have been in its new store pipeline, in some cases for more than 10 years.
"By building fewer stores, in the best locations, and making sure our existing stores are profitable, our company will be in a much stronger competitive position," Blake said.