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Macy’s to close 125 stores and cut 2,000 jobs

Macy’s to close 125 stores and cut 2,000 jobs

The iconic American department store chain Macy’s announced Tuesday that it will close about 125 stores in the next three years and cut 2,000 jobs to save money.

By Luxus Plus

 

The brand said in a press release: “Macy’s plans to close about 125 of its least profitable stores in the next three years, with around 30 stores already scheduled to close.” Annual sales in these 125 stores represent approximately $ 1.4 billion. Macy’s has 636 stores in the United States.

 

Macy’s in trouble because of online sales

 

Affected by digital sales, department store chains, which once attracted consumers to the “malls”, these giant shopping centers, have seen their results plummet for years and are forced to reduce their perimeter.

 

In addition to store closings, Macy’s also announced the reduction of 9% of its workforce in the support and headquarters functions, which corresponds to approximately 2,000 jobs. With this plan, Macy’s expects to save $ 600 million by 2020, and $ 1.5 billion by mid-2022.

 

At the same time, the brand plans to move up a hundred of the most profitable stores upmarket, as it has already done for 150 others, in which half of its sales are made. Macy’s head office will also move from Cincinnati (Ohio) to New York City. Consequently, the offices located in Cincinnati and Lorain (Ohio), as well as that of Clearwater (Florida) will close, as will the customer relations centers of Tempe (Arizona) and Mason (Ohio).

 

A new format of smaller stores, located in city centers and not in shopping centers, must also be developed. The first will open in Dallas on February 6. Macy’s, which is due to release its full 2019 results, reported net sales of $8.3 billion on Tuesday, down 0.5% in the fourth quarter of 2019. For the full year of 2019, sales were $24.5 billion, down 0.7%.

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The group, which also owns the Bloomingdale’s and Bluemercury banners, predicts a further contraction in sales in 2020, which should be between 23.6 and 23.9 billion dollars. The other two historic department store chains in the United States, Sears and JC Penney, are also in difficulty.

 

Read also > Protests in Hong Kong could cause $120 million in losses to Burberry

 

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