Merced's Orchard Supply location set to close

Merced's Orchard Supply Hardware store is one of nine across the state this week to announce plans to close, leaving its Merced workers facing unemployment in a very tough job market.

Orchard Supply Hardware did not provide the exact number of employees who will lose their jobs in Merced. Leigh Parrish, a consultant working for the company, said stores generally have 50 to 55 employees.

Betty Madsen, 66, of Merced is one of the roughly 50 employees who will no longer have a job when the store closes later this year.

An employee for five years, Madsen said she and co-workers got the news Monday morning.

"You're kind of in shock, it takes awhile to (sink in)," she said, throwing her hands up in the air.

"We can't do anything about it," she said. "I don't want to lose my job."

Finding new jobs will likely be difficult, with the city's unemployment rate at 14.1 percent in June, according to the most recent numbers available from the state Employment Development Department.

Home improvement chain store Lowe's entered into a purchasing agreement in June to acquire most of Orchard Supply Hardware's locations, not including the one in Merced. Orchard Supply filed for Chapter 11 bankruptcy in June.

Through the $205 million deal, Lowe's will acquire 72 of California's Orchard Supply stores.

Parrish said Orchard Supply will close nine stores not purchased by Lowe's in late summer or fall. The company announced last month that it would close eight other stores.

The reasoning behind the store closures involves each site's historical performance, Parrish said. Every location is being evaluated, she said, and some could be remodeled.

The Merced store's last day open will be based on how quickly merchandise is sold during closeout sales, which begin today, Parrish said.

Frank Quintero, Merced's economic development director, said the city will see effects from a loss of payroll, property and sales taxes.

"Obviously, we're disappointed that they're closing the store," Quintero said

The Orchard Supply corporation opened the Merced location in 1994, and owns the building on R Street. The building is assessed at $4.2 million for tax purposes, according to a Merced County Assessor's Office database.

The silver lining to the store's closure, Quintero said, is that city staff will look to market the soon-to-be empty Orchard Supply with the former Circuit City building, which closed in 2008. Seven acres of empty land is adjacent to those buildings.

The location is across R Street from the Merced Mall, and about a quarter of a mile from Olive Avenue.

"Combined together, we now can lay out, and perhaps develop, a plan that will promote a new shopping center there," Quintero said. "Olive Avenue is a very desired location."

Reporter Thaddeus Miller can be reached at (209) 385-2453 or tmiller@mercedsunstar.com.

This story was originally published August 14, 2013 at 10:47 AM.