Woolworth to Unload 450 Stores : Retailing: Up to 10,000 employees will be affected. The targeted U.S. outlets lost $50 million in the first nine months of the fiscal year.

Woolworth Corp., the retailer best known for the old-fashioned dime stores that once graced many downtown centers, says it will close, sell or revamp 900 money-losing outlets in the United States in a sweeping overhaul designed to boost its recession-starved sales and profit.

The retailer, which operates 6,500 general merchandise and specialty stores across the nation, said that up to 10,000 of its 70,000 employees in the United States will be affected by the moves.

However, the company could not say how many employees will be laid off, noting that many workers will be transferred to other Woolworth-operated stores. The changes are expected to begin shortly and be completed by the middle of 1993.

Although Woolworth routinely opens and closes outlets across the country to reflect changing demographic and economic patterns, company officials said the recession that has ravaged American retailers forced it into undertaking one of its most sweeping overhauls ever.

“It wasn’t just poor Christmas sales,” a spokesman said. “Our performance for all of 1991 was disappointing. The economic conditions are what drove this move.”

Woolworth, an American institution that traces its roots to 1879, said it will close 25% of its Kinney shoe stores, 15% of its Kids Mart and Little Folk Shops children’s apparel stores, and 8% of its more than 1,000 Woolworth and Woolworth Express general merchandise outlets.

In all, about 450 stores will be closed or sold, while the rest will be converted into one of the company’s more successful retail families, such as Foot Locker, Lady Foot Locker, Kids Foot Locker and Athletic X-Press--all sport shoe outlets--and Northern Reflections, a women’s outdoor sports wear chain.

The company also said it will revamp virtually all of the 207 stores in its women’s apparel division, which includes Susie’s and Sportelle stores. It will close or sell its 268-store Richman Bros. and Anderson-Little clothing unit, none of which are in Southern California.

The company declined to say how many California stores will be affected. However, all 14 Susie’s outlets in Southern California will be closed or revamped. There are nine Susie’s in Los Angeles County, three in Orange County and one each in Ventura and San Bernardino counties.

Analysts generally cheered the moves as an indication that Woolworth is serious about continuing its conversion from a lackluster dime-store operation to a highly profitable family of specialty outlets, a strategy unveiled a decade ago and pursued with success until the recession hit with a vengeance last year.

“It’s a very smart move,” said Kurt Barnard, president of the Retail Marketing Consulting Group in New York. “If they hadn’t done this now, they could have exposed themselves to an unfriendly takeover that would have done the same thing.”

Woolworth stock jumped $1.50 to close at $29 on the New York Stock Exchange.

Through the first 11 months of its fiscal year, which ends Jan. 25, sales at Woolworth outlets in the United States open at least one year fell 1.7%. Overall, U.S. sales rose just 3%, while sales from the company’s more than 9,300 outlets worldwide were up a paltry 0.9%.

The company said the outlets targeted for closing or revamping lost $50 million during the first nine months of the fiscal year and accounted for just $342 million of the $3.9 billion in sales generated by all the company’s operations in the United States.

Woolworth said it will take a $250-million after-tax charge to cover the costs of store closings and conversions in the fourth quarter. The company said it will take an additional $115 million after-tax charge for an accounting change.

At the same time that Woolworth announced the overhaul of its American operations, it said it will spend up to $400 million in its 1993 fiscal year to open nearly 850 stores throughout the world, a move some analysts interpreted as a further sign that Woolworth is increasingly seeking its fortunes internationally.