Later, wanks
Wal-Mart May Never Enter Manhattan
Wednesday March 28, 4:55 pm ET
By Anne D'Innocenzio, AP Business Writer
Report: Wal-Mart's CEO Says Manhattan Location May Never Happen
NEW YORK (AP) -- Wal-Mart, embattled by failed attempts to open stores in Queens and Staten Island, may be giving up on New York, or at the very least Manhattan.
In an interview with The New York Times, published Wednesday, Lee Scott, Wal-Mart chief executive and chairman, said that trying to conduct business in New York was so expensive that "I don't think it is worth the effort. I don't care if we are ever here," he told The New York Times at a meeting with editors and reporters on Tuesday.
But Wal-Mart officials quickly clarified that Scott, who in the interview made repeated references to "New York," was referring to Manhattan, and not the entire city.
"We have never tried to get into Manhattan and aren't sure we ever will unless the economics of the specific deal make sense for us. We would like to be in other boroughs if we can find the right arrangement, because we know we could serve those communities very well," said Kevin Thornton, in an e-mail response to The Associated Press Wednesday.
Still, Stuart Applebaum, president of The Retail, Wholesale and Department Store Union, which is leading the charge against Wal-Mart in New York, said Scott's comments were good news for the union. The union represents 100,000 workers throughout the U.S. and Canada, including 45,000 workers in New York.
"They are going to find that no matter where they are in New York City, the response is going to be the same," Applebaum said. "New Yorkers will not tolerate their way of operating. Their promises of low prices come at too high of a cost."
Applebaum said that if Wal-Mart were able open in New York -- the nation's largest city -- it would mean that there "would be no place that would be off limits."
Patricia Edwards, a portfolio manager and retail analyst at Wentworth, Hauser & Violich in Seattle, which manages $9 billion in assets and holds about 42,845 Wal-Mart shares, noted that even if Wal-Mart writes off the New York area, she doesn't see it as a big financial blow.
"There are a lot of retailers that do quite well and they are not in New York," she said. While she said there's certainly a huge demographic base, stores face high property values and shipping costs.
Union-backed critics in New York and elsewhere have waged a fierce campaign against Wal-Mart, asserting that the retailer's wages and benefits are so modest they drive down pay and benefits for many of its competitors and force employees to go on state-funded health care plans. Wal-Mart has denied union claims, asserting that it creates jobs and raises the standard of living for many residents with its low prices.
The campaign by union-backed groups in New York clashed with Wal-Mart in its failed attempts by to open stores in Rego Park, Queens in 2004 and in Staten Island last year.
Wal-Mart Stores Inc., whose sales growth has slowed in recent years, is looking to urban markets as the next frontier to fuel domestic growth. Those efforts have been met with resistance from labor and neighborhood groups.
Wal-Mart entered Chicago last year, it's biggest city, but only after the city's mayor vetoed an ordinance requiring higher wages.
In the interview with The New York Times, Scott said that the Wal-Mart store in Chicago has performed better than expected.
Shares of Wal-Mart fell 85 cents, or 1.8 percent, to close at $46.64 on the New York Stock Exchange.
http://biz.yahoo.com/ap/070328/wal_mart_new_york.html?.v=3
