Columbia House to close distribution center, 500 to lose jobs

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COLORADO CITY, Colo. (AP) Columbia House announced Tuesday it will close its giant compact disc and video distribution center by the end of the year, a decision that means all 500 employees will lose their jobs.

An executive from the company's New York headquarters arrived in Colorado City to deliver the news, said Tom Worm, the distribution center's director.

''The rumors had been heavy here for some time now,'' Worm said. ''People weren't shocked. But there was some relief to know the truth, and then some sadness that good jobs are disappearing in an area where there are not a lot of jobs.''

Columbia House distributes 100,000 videotapes and compact discs daily from its warehouse near Interstate 25 about 20 miles south of Pueblo. The company is co-owned by AOL Time Warner and Sony.

Columbia House also has distribution centers in Indiana, Canada and Mexico. A domestic order processing center employing 190 in Bloomington, Ind., will also be closed by the end of June and that business, along with that from Colorado City, will be moved to a facility in Terre Haute, Ind.

Bloomington employees will be offered the opportunity to transfer to Terre Haute, the company said. The Canadian and Mexican facilities will not be affected.

Record-club sales nationwide have been sagging for several years because of competition from Internet sales and computer sites such as Napster, where some copyright music can be downloaded free.

About 60 percent of the warehouse's workers live in Pueblo. The remainder live in southern Colorado, including Colorado City and Rye.

''In a community like Colorado City and Rye, it's going to have serious impact on the economy,'' said Pueblo County Commissioner John Klomp. ''Columbia House has been a real community player.''

The company pays $115,000 annually in property taxes on its warehouse, which has an assessed value of $3.6 million, according to the Pueblo County assessor's records.

The Colorado Department of Labor and Work Link, a training service organization in Pueblo, said they will help employees look for other jobs.

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