Two unexpected retailers are now laying off in Connecticut according to WARN notices filed with the state.
Bob’s Stores and Eastern Mountain Sports are expected to lay off a total of 154 employees at their warehouse facility in Meriden.
The layoffs, which will impact 145 Bob’s Stores workers and 9 Eastern Mountain Sports employees, are planned to take effect by May 31.
In addition, the company spokesperson confirmed that five “underperforming” store locations will be shut down—one Bob’s store in Southington, two in New Jersey, and two Eastern Mountain Sports sites in New York and New Hampshire.
The cuts were disclosed after the retailers’ president, David Barton, notified state labor officials that the company’s lender is refusing to provide funding for payroll and benefits in the future.
In a WARN notice filed with the Connecticut Department of Labor, Barton stated the “financial issues with its lender” prompted the layoffs and closures as the company works to “aggressively reposition the business to ensure the longevity of the company”.
Both companies are owned by Los Angeles-based GoDigital Media Group, which purchased Eastern Mountain and Bob’s Stores in 2022 for $70 million from U.K.-based Frasers Group plc.
At the time of the deal, GoDigital said it added 900 employees, 42 stores and a warehouse and fulfillment center.
“We are actively working to relocate as many employees as possible from these impacted locations to nearby Bob’s and Eastern Mountain Sports stores,” a company spokesperson said.
“These closings have been a challenging yet necessary step to ensure the longevity of the company.
We are grateful for the hard work and dedication of all our employees, and will continue to serve our loyal customers who have known and loved our brands for decades.”
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Other Economy News Today
Applications for unemployment benefits now surge to new highs, a sign that the white-hot labor market is starting to cool off.
First-time applications for unemployment benefits rose last week to 231,000, the highest level since August, per CNN.
Thursday’s data also showed that the number of continuing claims, or applications from people who have filed for unemployment for at least one week, was 1.78 million.
That’s an increase of 17,000 from the prior week, according to the Bureau of Labor Statistics.
The latest numbers come less than a week after the monthly jobs report showed the US economy added just 175,000 positions in April, less than economists expected and a steep drop-off from prior months.
US employers have now added an average of 245,500 jobs per month, versus 2023’s 251,000-per-month average.
Still, hiring remains strong. Although the unemployment rate ticked up to 3.9% last month, it’s the 27th consecutive month that the jobless rate has held under 4%, matching a streak last seen in the late 1960s.
Weekly jobless claims data tends to be volatile but, while one week’s worth of data “does not a trend make,” said Chris Rupkey, chief economist at Fwdbonds.
“We can no longer be sure that calm seas lie ahead for the US economy if today’s weekly jobless claims are any indication.”
“Company layoffs are picking up, hinting at caution on the part of companies as they weigh the outlook for the second half of the year,” he wrote in a note Thursday.
The Federal Reserve has been battling inflation by raising its key lending rate in the hopes of slowing the economy.
While the labor market has so far resisted those efforts, remaining white hot for the past 18 months despite 11 rate hikes from the central bank, Fed Chair Jerome Powell said last week that demand has “cooled from its extremely high level of a couple of years ago.”
Ian Shepherdson at Pantheon Economics said in a note Thursday: “We’d need to see at least a month of elevated readings to convince us that the trend really has turned.”
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Also Read: A Giant Company Now Announces Unexpected Layoffs in Virginia
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