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Wal-Mart hits Big Apple pothole
Opposition prompts developer to drop plans for first NYC store; CEO Scott lashes out at critics.
February 24, 2005: 10:16 AM EST

NEW YORK (CNN/Money) - A major New York real estate developer has dropped plans to include a Wal-Mart in a mall here, a move that would block the first New York City location for the world's largest retailer, according to published reports.

The New York Times reported that Vornado Realty Trust (Research) is dropping plans for the Wal-Mart (Research) in a shopping mall in the city's borough of Queens due to intense opposition from labor unions, neighborhood retailers and city officials concerned about the effect that the store would have on competitors.

A spokeswoman for Wal-Mart told the paper the company was still exploring other potential sites in the city. But the move is a blow to Wal-Mart, whose executives have said New York City was an important new market for the Arkansas-based retailer.

A Vornado spokeswoman declined to comment, except to tell the Times there was never a formal deal between Vornado and Wal-Mart. The paper reported that Vornado had hoped to win approval for the mall before plans to include a Wal-Mart became publicly known.

Wal-Mart stock edged lower Wednesday, while Vornado shares were flat.

The apparent setback in New York City came a day after Wal-Mart CEO Lee Scott defended the company against critics who say it doesn't pay workers a fair wage and that its purchases of imports in effect exports jobs to other countries.

In a heated speech to California business leaders, Scott said labor unions like the United Food and Commercial Workers and higher-priced retailers were operating out of self-interest, not public interest, when they complained about his company.

"There are some who say that Wal-Mart's wages and benefits have some kind of negative impact on wages across the board," he said at a luncheon in Los Angeles, Reuters reported. "We believe that's just wrong -- just dead wrong."

And Scott defended buying cheap goods from places like Bangladesh where factory workers earn very little, one of the ways Wal-Mart is able to keep its prices so low.

"I've been in the factories in Bangladesh," he said. "It's not the life you want to lead, it's not the life I want to lead. But it's a life that is very much a step up from the life that those people would otherwise lead."  Top of page


Vornado Realty Trust
Queens (New York)
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