LIVERPOOL, N.Y., -- Fay's Inc. said Wednesday it is closing nine Paper Cutter Stores in the Philadelphia area, affecting about 125 jobs and costing the company about $3.3 million, or 16 cents a share, in first quarter net earnings.
Warren D. Wolfson, senior vice president, said the decision was made to close the stores because they could not find suitable real estate quickly enough to make ad promotions worthwhile.
The stores sold office products, books, greeting cards and party supplies.
Wolfson said it was a 'highly promotional-type operation.
'With advertising costs as they are in the Philadelphia market you can't operate with nine stores very efficiently,' he said. He said they would have needed about 20 stores to make it worthwhile.
Each store has about 14 employees.
Fay's Chairman Henry A. Panasci, Jr. said, 'With the elimination of these stores, we expect The Paper Cutter will be profitable in fiscal 1994.'
He said Fay's will also incur a one-time, non-cash charge to its first quarter net of $4.7 million, or 23 cents a share, for the new accounting standards on benefits for retirees.
Fay's reported earnings for the fiscal year ending Jan. 30, 1993, of $11.2 million, or 56 cents a share, on sales of $902.6 million.
Wolfson said Fay's operates 248 Fay's Drugs stores, 23 of them in the Scranton--Wilkes-Barre area of northeast Pennsylvania.
Stores being closed are in Chalfont, Chestnut Hill, Wayne, Norristown, Whitehall and Fairless Hills in the suburbs of Philadelphia, on Roosevelt Boulevard in northeast Philadelphia, and in Deptford and Turnersville, N.J.
