Will store closings and layoffs fix what ails Macy’s?
Macy’s, Inc., like many of its department store peers, found tough going in 2015. In response, the owner of Macy’s and Bloomingdale’s has announced that it will close 40 stores (four were previously announced) and eliminate more than 4,500 positions as part of its corporate restructuring.
The company saw same-store sales decline 4.7 percent in November and December, which it blamed primarily on unseasonably warm temperatures in much of the U.S. Terry Lundgren, chairman and CEO of Macy’s, Inc., estimated that 80 percent of the decline could be attributed to unsold cold weather goods such as coats, scarves and gloves.
Mr. Lundgren described the decision to close stores as a simple response to the needs of the markets it serves.
“Our company is committed to operating great Macy’s and Bloomingdale’s stores in the best locations — both to serve shoppers who walk through the door and to fulfill orders that are shipped directly to customers around the country,” said Mr. Lundgren. “In today’s rapidly evolving retail environment, it is essential that we maintain a portfolio of the right stores in the right places. So we will continue to add stores selectively while also being disciplined about closing stores that are unproductive or no longer robust shopping destinations because of changes in the local retail shopping landscape.”
Macy’s was quick to downplay the number of job cuts. According to the company, it is looking to eliminate an average of three to four jobs at each of its 770 stores. While 3,000 will be affected, roughly half of those are expected to find jobs in other positions within the company. Individuals working in about 150 of 600 back-office positions that are being eliminated will also be reassigned.
While acknowledging belt tightening, Mr. Lundgren said Macy’s, Inc. would continue to invest in its omnichannel operations and other areas that will help realize his long-term vision “as a dynamic retailer that serves existing customers and acquires new ones through innovative approaches to the marketplace.”
- Macy’s, Inc. Reports November/December Sales and Updates 2015 Guidance – Macy’s, Inc.
- Macy’s, Inc. Outlines Cost Efficiency Initiatives and Lists Store Locations to Be Closed – Macy’s, Inc.
- Macy’s announces layoffs, lists 36 store closures – USA Today
What is your assessment of the challenges that face Macy’s, Inc.? Do you approve of the company’s response in terms of store closings and layoffs?