Skip to footer

Macy's to close stores, cut jobs amid weak sales

The prominent retailer is eliminating over 10,000 jobs and closing 68 stores nationwide. The company was struggling with declining traffic in stores, and was under pressure from investors to sell some of its valuable real estate.

|
Carlos Gonzalez/AP
This photo taken Feb. 6, 2008 shows Macy's ' pedestrians walking in and out of Macy's in the skyway connecting it to the IDS Building in downtown Minneapolis.
  • By Sarah Skidmore Sell Associated Press

Macy's says it is eliminating more than 10,000 jobs and plans to move forward with 68 store closures after a disappointing holiday shopping season. The department store chain also lowered its full-year earnings forecast.

The retailer said Wednesday that sales at its established stores fell 2.1 percent in November and December compared to the same period last year. Macy's Inc. pointed to changing consumer behavior and said its performance reflects the challenges that are facing much of the retail industry.

As if to underscore that point, Kohl's Corp. also reported disappointing holiday shopping numbers Wednesday.

Macy's said the 68 store closures, which span the nation, are part of the 100 closings it announced in August. Of the 68, three were closed by the middle of 2016, 63 will close in the spring and two will be closed by the middle of 2017.

Some employees may be offered positions at nearby stores, but Macy's estimates that 3,900 employees will be affected by the closures.

Macy's also said it plans to restructure parts of its business and sell some properties. This will lead to the reduction of 6,200 jobs. The moves are estimated to save $550 million annually.

The company, which has been under pressure from investors to sell some of its valuable real estate, is selling or has sold three locations. It is leasing the properties back and will keep operating those stores.

Overall, Macy's said, the job reductions represent about 7 percent of its workforce.

The company, which owns the Macy's and Bloomingdale's brands, has been struggling with declining traffic in its stores, where the bulk of its business is still conducted.

Longtime CEO Terry Lundgren, who is stepping down early this year and will be succeeded by Macy's President Jeff Gennette, said in a statement the company is closing stores that are "unproductive or are no longer robust shopping destinations" as well as selling those with highly valued real estate.

Macy's has seen sales growth slow as it and other traditional department store chains face competition from online and off-price rivals. It has tried new ways to attract shoppers, such as by offering more exclusive products, designating areas featuring "smart watches" and launching an Apple shop at its flagship New York store in Herald Square.

The company said Wednesday it plans to invest some of its savings in growing its digital business.

It said it now expects to earn between $2.95 and $3.10 per share on an adjusted basis for its 2016 fiscal year, versus its prior forecast of $3.15 to $3.40 per share. The company is scheduled to report full results in February.

Shares in Macy's fell more than 10 percent to $32.20 in after-hours trading.

Kohl's shares fell almost 15 percent to $44.15 after it cut its earnings guidance for fiscal 2016. It now expects $3.60 to $3.65 a share on an adjusted basis, down from its previous forecast of $3.80 to $4.00 per share.

You've read  of  free articles. Subscribe to continue.
Real news can be honest, hopeful, credible, constructive.
What is the Monitor difference? Tackling the tough headlines – with humanity. Listening to sources – with respect. Seeing the story that others are missing by reporting what so often gets overlooked: the values that connect us. That’s Monitor reporting – news that changes how you see the world.
editor@csmonitor.com
Subscribe
Mark Sappenfield
Editor

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to CSMonitor.com.

Subscribe to insightful journalism

QR Code to Macy's to close stores, cut jobs amid weak sales
Read this article in
https://www.csmonitor.com/Business/2017/0104/Macy-s-to-close-stores-cut-jobs-amid-weak-sales
QR Code to Subscription page
Start your subscription today
https://www.csmonitor.com/subscribe