PEABODY — Fifteen years ago, the retail sector had the largest number of jobs on the North Shore. Not so anymore. And local residents are getting an up-close and personal look at that downward trend.
Three high-profile stores — Toys R Us at the Northshore Mall in Peabody, Babies R Us on Route 114, and Modell's Sporting Goods in the North Beverly Plaza — closed recently, and Sears, a longtime anchor of the Northshore Mall, will be closing soon. Together, they will mean a loss of up to 189 jobs.
According to the Salem-based North Shore Workforce Investment Board, Toys R Us, which filed for bankruptcy in the fall and announced it was closing its U.S. stores in March, had about 60 layoffs locally. That number includes jobs at a Toys R Us Express in Saugus. Modell's had 15 layoffs. Sears should see 65 to 70 layoffs when the store closes later this summer. And Babies R Us laid off 44 people when it closed, according to the North Shore Career Center.
The job losses are coming at a time of low unemployment. In May, the Massachusetts unemployment rate remained at 3.5 percent.
Those close to the local labor market say the dozens of workers who have been displaced should be able to find work.
"I don't see this as a beginning of a softening of the labor market on the North Shore," said Mark Whitmore, executive director of the North Shore Career Center
But there has been a softening in the retail sector. Internal business problems factor into each of the closing decisions, but they also point to the general disruption caused by online shopping.
The closure of the Sears will be part of a round of more than 70 Sears and Kmart closings nationwide. The troubled retailer said earlier this year it had identified more than 100 unprofitable stores, and decided to close many of them to streamline operations and focus on its best stores.
"Eligible associates impacted by these store closures will receive severance and will have the opportunity to apply for open positions at area Kmart or Sears stores," the company said in a statement.
The Toys R Us and Babies R Us closings are also part of nation-wide shutdown, coming six months after the chain filed for bankruptcy.
Jon Hurst, a Beverly resident who is president of the Retailers Association of Massachusetts, is familiar with the stores that have closed or are closing. He says they are closing at a time when shoppers never have to leave their couches to shop: They can do so on their smartphones or tablets.
But there is another factor at play.
The nation is "overstored," he said. The United States has far more commercial real estate per square foot per person than other countries, Hurst said.
A 2015 presentation by the commercial real estate services firm JLL said the United States had six times more square feet of retail space per person than the United Kingdom.
Hurst predicts there will be a reduction in retail store space, but that may not mean fewer stores. There may be smaller and more diverse stores whose operations are integrated with an online shopping experience.
Hurst added that it is somewhat discouraging that commercial rents have not dropped despite the glut of store space.
In any event, malls are trying to reinvent themselves to become live, work and play destinations with housing, offices and restaurants.
The retail industry in Massachusetts is still strong, Hurst said. The sector is responsible for $100 billion in sales and 550,000 jobs, including those at restaurants and gas stations. Just 5 percent of the state's sales happen online, when sales of autos, gasoline and meals are excluded, he said. If you include sales in those categories, online buying accounts for 10 percent of sales, he said.
"Stores are not ever going to go away," Hurst said, "but they have to be integrated with other operations."
"Retail is a labor-intensive industry," says Mary Sarris, executive director of the North Shore Workforce Investment Board, which oversees the North Shore Career Center, with locations in Gloucester, Salem and Lynn.
Sarris said retail jobs are often part time, with career ladders that do not offer as many opportunities as health care and manufacturing.
"Obviously the major impact changing retail is technology – as it is doing in so many industries. But now online buying is so big that retail is really a technology business," Sarris said.
Health care is now the North Shore's top employer.
Between 2001 and 2015, the retail sector on the North Shore lost 1,325 jobs, according to figures provided by Sarris. Annual monthly employment in retail stood at 27,383 in 2001 and 26,058 in 2015.
It's a drop of 4.8 percent.
Statewide, the trend has been less severe, with retail trade employment falling 1.5 percent.
"Any person laid off will receive assistance finding employment," Sarris said, "as well as potential funding for re-training. We sense that it will be relatively easy to find similar work. ... However, it is also not always an easy transfer to a new company, so re-training and coaching on how to interview, prepare a resume, etc. is often needed."
It's also a good time to consider other opportunities.
"The employees that are being displaced have an opportunity to reinvent themselves," said Whitmore.
Whitmore said one of the first things the center does is ask workers what they want to do.
"Some people just love retail," he said. Others may have skills that translate to customer service, hospitality, call centers or corporate sales jobs.
Main Street perspective
Jenna Coccimiglio, the new executive director of the Peabody Area Chamber of Commerce, is a huge fan of Sears and its Lands' End brand, and she laments its loss. Its demise, she said, has to do with both online shopping and a chain that failed to reinvent itself.
Stores nowadays have to create an experience, Coccimiglio said. Malls are reinventing themselves, creating outdoor experiences to attract shoppers. At the Northshore Mall, for example, the resort-like Life Time fitness center will be taking the place of the Sears building.
Coccimiglio said the loss of Sears and other stores shows why it is important for people to keep shopping locally, even if the store is part of a nationwide chain. The employees and managers live locally. Stores and malls pay local taxes. And employees frequent other shops, or buy gas and coffee on the way to work.