Macy's To Close Stores, Cut Jobs Amid Weak Holiday Sales
Macy's, the country's largest department store chain, announced on Wednesday that it plans to eliminate more than 10,000 jobs and will continue with its plans to close 100 stores.
NPR's Chris Arnold tells our Newscast unit:
"Holiday sales were at the low end of what they had forecast — and that disappointed investors. All of this is in part due to the pressure that online shopping is putting on brick and mortar retailers."
Macy's announced that sales at established stores fell 2.1 percent in November and December compared to the same period in 2015.
The retailer had announced in August that it would close 100 stores. On Wednesday, the locations of those stores were made public.
The Associated Press reports:
"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."
In a statement, Macy's President Jeff Gennette said, "The company is closing stores that are unproductive or are no longer robust shopping destinations."
Macy's announced a year ago that about 4,500 jobs would be lost during a major restructuring.
"Revitalizing the business will not be easy," Neil Saunders, chief executive at retail consultancy Conlumino, told Reuters.
"Shopping trends are firmly against Macy's, and its brand, while not completely diminished, is most certainly tarnished."
Macy's CEO Terry Lundgren said the number of shoppers at its stores continues to decline, but its online business performed well.
Chris adds that:
"Macy's plan here is to restructure and focus on its better-performing stores. The company says it will save $550 million through this cost-cutting, and it plans to reinvest some of that in its digital shopping business.
Also on Wednesday, Kohl's Corp. announced that its stores also had disappointing holiday sales figures.
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