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Macy’s to Close Stores, Cut Staff as Holiday Sales Drop

Jan 11, 2016 3:02 AM   By Rapaport News
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RAPAPORT... Macy’s will close 40 stores and reduce staff numbers as part of a restructuring to cut costs following “disappointing” sales and earnings results in 2015.

Of the 40 stores, 36 will be closed in early spring 2016 and the remaining four were shut in the final three quarters of 2015, according to a statement January 6. The outlets – out of 770 in total – account for about $375 million in annual sales, some of which are expected to be retained in nearby stores and with online and mobile sales.

The U.S.-based retailer will be “adjusting” staffing levels in a move that will affect an average of three to four positions in each Macy’s and Bloomingdale’s store out of an average of 150 associates per store. The process will affect about 3,000 employees nationwide. Roughly half of those will be placed in other positions.

The company will also implement a “voluntary separation opportunity” for about 165 senior executives in Macy’s and Bloomingdale’s central stores, office and support functions who “chose to leave the company beginning in spring 2016.” Around 35 percent of these positions will not be replaced.

A further 300 back-office positions will be cut by eliminating tasks, simplifying processes and combining positions. About 150 people will be reassigned to other positions. The grouping of stores will be changed from seven regions and 58 local districts to five regions and 47 districts, as well as other field-support functions.

The cost reductions are aimed at achieving approximately $400 million of annual cost savings, beginning in 2016.

Macy’s holiday-season sales on an owned-plus-licensed basis declined 4.7 percent year on year in November and December and comparable sales dropped 5.2 percent on an owned basis compared with last year, according to a separate statement January 6. Comparable sales for the full-year 2015 on an owned-plus-licensed basis will probably fall about 2.7 percent, it guided.
Tags: Macy’s, Rapaport News, restructurings, retail, u.s.
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