By JENNETTE BARNES Returning to the Warwick Apex store yesterday to reminisce, the store's original manager, James T. Rassol, found the parking lot packed with cars. Shoppers had come looking for closeout prices, but Rassol lamented the waning of Rhode Island's last locally owned department store. The announcement that Apex will close two of its three retail locations comes within a month of Ann & Hope, a local pioneer of discount retailing, saying it will close its Massachusetts stores and dramatically scale back in Rhode Island. Rassol was not surprised to hear of the Apex closings. Rumors of impending trouble for the store had circulated for some time. Nonetheless, the news stunned retail sales staff Tuesday. “I can't talk about it without crying,” said Lois Sauro of Providence, who works in the women's clothing department at the Warwick store. Employees were not told about the closing until Tuesday morning when they arrived at work, she said. “We knew there was something in the air,” Sauro added as another employee, standing nearby, said customers had been asking since Christmas if the store was closing. Sauro said she heard similar rumors when she was hired five years ago. Michael Dvorkin, an Apex vice president, said it was unrealistic to suggest the company could have told its employees a day before the media announcement. “Don't you think these people have relatives?” he said. “They make their own phone calls.” Apex, founded in 1924 in Providence, will close stores in Warwick and Swansea, Massachusetts, within 90 days. The remaining retail location in Pawtucket will be reduced from 90 employees to between 20 and 30. Apex will also continue to run its Internet business from Pawtucket, where the corporate headquarters is located. The company's distribution center in Seekonk, Mass., has been sold to Boston Warehouse. Sauro said she felt “terrible” about the closing. “As a shopper and an employee, I'm very sad,” she said. “I've been shopping here for thirty years.” Sauro wasn't sure Tuesday how long her health benefits would last after the closing. She had the paperwork, but hadn't had time to review it, she said. Dvorin declined to reveal any details of separation pay packages or how long employees' health insurance would last. “Certain things are personal to people. We're trying to help our employees transition through a difficult time,” he said. It is unlikely that employees from Warwick or Swansea will be transferred to the Pawtucket operation because of the staff reduction there. Before the announcement, Apex had about 400 employees, and 370-380 will lose their jobs, according to Dvorkin. Eileen Landes of Westerly was shopping in the Apex store Tuesday when she heard the news of the closing. A former Barrington resident, Landes had become accustomed to shopping in the Massachusetts store. Once she moved to Westerly, shopping at Apex was still worth the drive to Warwick, she said. “Every vacuum I've had has come from here, and almost all my appliances. Linens from here I've had for years,” she said. Landes was shopping for bed linens Tuesday, but when she heard of the closing, she went to lunch and then returned to the store to look around. “I'm crushed. It's a great store. I've been shopping here for 28 years,” Landes said, adding that she likes the variety and quality of the merchandise. Where will she be shopping now? Wal-Mart. Although Apex is more of a department store than a discount store, customers say they will take their business to discount stores and to the malls in the absence of Apex. “I'm not crazy about Wal-Mart, but it's the closest thing to where I live. Every time I go there, I go home and say, ‘I miss Ann & Hope,'” said Landes. “I went to Providence Place the other day, and there was no one there. I hope it makes it.” Landes said she is frustrated that Rhode Islanders' homes and businesses are “put on the line” when a development like Providence Place gets tax breaks and other benefits. She repeated her regret over the loss of the Ann & Hope discount stores and concluded, “It doesn't say much for the economy of Rhode Island.” Tiffany Johnson, a Warwick native, brought her seven-week-old son, Max, to Apex after she heard of the closing. “It's sad. This is a great store. It's like a department store,” she said. Johnson said she probably would not travel to Pawtucket to patronize the remaining store. She plans to shop at the malls and at discount stores. Dick Murphy, shopping in Apex the day the closing was announced, said he would miss the store. He and his wife will travel to the Pawtucket location occasionally, but not as often as they shopped at the Warwick store, he said. When asked where he would take his business, Murphy wasn't sure, but said perhaps Wal-Mart, which he called “well-run.” “[Apex] is much nicer, and the quality is better than Wal-Mart, but Wal-Mart's not bad,” he said. Murphy plans to avoid the malls. “I miss single stores. The malls are too crowded and full of kids,” he said. Murphy said that in the 20 minutes he had been in Apex, no one asked him if he needed help. He said he misses the personal touch stores had in days gone by. James T. Rassol, the first manager of the Warwick Apex store, managed the location from 1965-1991, when he was transferred to the Pawtucket store for two years before his retirement. Rassol has much respect for the family owners of Apex. “In the old days in the store, it was like family,” he said. “Most people had worked there a long time, and we knew them, and we knew their families.” In a 1990 Warwick Beacon profile of Rassol on his 25th anniversary with Apex, he recalled the electrical failure that affected much of New York and New England on November 9 and 10, 1965, two days before the store's official opening. Power was restored in time for the outdoor celebration, which featured then-mayor Horace Hobbs and a large grandstand in front of the store, Rassol said. Among his best memories of Apex are the times spent excitedly preparing to open expanded portions of the store on time, Rassol said yesterday. The Warwick store saw a major expansion in 1968, followed by the addition of a garden shop in 1970. The tire center, formerly separate from the main store, was expanded in 1981 or '82, when Apex added a restaurant, connecting the buildings. “Customers had asked for years for a place they could eat while they were out shopping,” Rassol said. “We didn't want it inside the store, because we didn't want food tracked through. There was a natural space between the store and the tire center to put the restaurant outside.” Rassol also remembers the “endless” day-after-Christmas lines in the Christmas Shop section of the store. Hundreds of people would attend the annual sale. The store's décor pleased the longtime manager. Describing it as “beautiful,” he said Apex continually updated both the décor and the merchandise. Sales peaked in the late 1980s before the recession of the early ‘90s, according to Rassol, who said that at its peak, Apex had the highest sales per square foot of any store in the state. He suspects the state banking crisis also contributed to the company's problems, not directly but through slower sales. “I mean, we didn't fall off a cliff,” he explained, “but things plateaued at that time.” When asked what the circumstances surrounding Apex's closing say about the Rhode Island economy, Rassol said that, although Providence Place and T.F. Green Airport are doing well, some businesses are “on the fringe” due to competition from retail giants like Macy's and Wal-Mart. Those corporations have vast resources and can offer an assortment of products that is beyond the reach of other stores, he said. Rassol, who grew up in Brooklyn, likened the Apex closings to the takeover of Abraham & Strauss, a New York landmark, at the hands of Macy's and Federated Department Stores. He feels a sense of regret. “It's rather sad, because you hope things stay the same,” he said. “It's not that Apex didn't adapt. They were overwhelmed by competition. Now they're trying to adapt, in their own way, to the future of retailing.” The Pawtucket store will serve as a venue for Apex to test its new business model. Apex will refine what it calls its “At-Home” division, which Dvorkin said concentrates on merchandise like cookware, glassware, and picture frames. The company wants to become more of a niche marketer, he said, and will drastically scale back its electronics department. The Apex website will feature similar merchandise. The company is considering renting a portion of the unused space in its Pawtucket store to a garden center, but no official agreement has been made. As for the Warwick building, Apex may sell it, but again, the company has not made a final decision. “It's been a challenging year for local and national retailers,” Dvorkin said. “A lot of additional retail space has gone up over the last decade, and the population hasn't grown much. There's less customer to go around. It's not a question of doing anything right or wrong.” With lagging sales, the company was not convinced its existing retail concept could survive. Indeed, scaling back its stock is nothing new for Apex. According to Dvorkin, Apex has repeatedly discontinued categories of merchandise in recent years, including shoes, juniors' clothing sizes, compact discs, computers and exercise equipment. The company plans to maintain its existing quality and price levels for now, but as its finds its new market, it may add more high-end items, Dvorkin said, adding, “We want to get to a nucleus we can experiment with.” The vice president said Apex would like to entertain opening a new store in Warwick if its revised business model is successful. In 1924, Albert Pilavin founded Apex as the Apex Tire & Rubber Company in Providence. The Westminster Street shop rebuilt tires. Pilavin moved his business to Pawtucket after the Hurricane of 1938. He placed the retail portion of the business in a small store in the back of the Pawtucket building, and later began selling appliances and electronics. Apex opened a second store, the Warwick location, on November 12, 1965. The Swansea store opened in the early 1980s, and Apex launched its website in 1996. According to company lore, Pilavin chose the name “Apex” because his initials were A.P. and because the word's meaning, the highest point or peak, suggests superiority.