Chain will shutter stores and eliminate 10,000 jobs to counter disappointing holiday sales.
Macy’s reported that same-store sales in November and December dropped 2.1 percent year-over year, slumping sales that have led the chain to announce the closing of 68 stores and the elimination of some 10,000 jobs, according to the L.A. Times. CEO Terry Lundgren said he expects 2017 sales to decline at a similar rate to the company's latest holiday performance.
Among the actions to be taken noted by Macy’s in its company statement are:
The statement asserted, “These actions bolster the company’s strategy to further invest in omnichannel capabilities, improve customer experience and create shareholder value.”
The goal of these actions is to generate annual expense savings of some $550 million, which will allow for future investment of $250 million in digital business, store-related growth strategies in 2017.
“Over the past year, we have been focused and disciplined about making strategic decisions to position us to gain market share and return to growth over time. While we are pleased with the strong performance of our highly developed online business, as well as the progress we have made on selling and visual presentation programs and expense reduction initiatives in 2016, we continue to experience declining traffic in our stores where the majority of our business is still transacted. Given the overall trends challenging us and the broader retail industry, and the time needed to execute new strategies, we expect our 2017 change in comparable sales to be relatively consistent with our November/December sales trend,” said Terry J. Lundgren, chairman and chief executive officer of Macy’s, Inc.
“Our omnichannel strategies continue to evolve based on the changes in our customers' shopping behaviors, including a focus on buy online, pickup in store and mobile-enabled shopping,” continued Lundgren. “In addition, we have invested in and enlarged our customer data and analytics team, which will help drive our new marketing strategies for 2017. Whether it is improving corporate agility, enhancing our customer engagement strategies, or continuing to capitalize on the potential value of our real estate assets, we remain focused on the actions that will ultimately improve our financial results and provide the greatest return for our shareholders.”
Of the 68 stores Macy's is closing, three were shuttered mid-year, 63 will be closed in early spring, and two will be closed in the middle of the year. Three other locations were sold, or will be sold, and are being leased back. A complete listing of store closings may be found here.
