SHELBURNE, Vt. (AP) -- The nation's worsening economy has hit home in Vermont -- again. Vermont Teddy Bear Co. is laying off 35 people and will close a retail store.

Bob Crowley, chairman of the board of the Shelburne teddy bear maker, says the jobs will be eliminated at locations in Shelburne and Newport and that the retail store -- in Waterbury -- will close in January.

He says the company, which is known for handmade teddy bears popular with holiday gift-givers, had strong sales in December, but that the moves are necessary to assure its future despite the economic downturn.