Sales dropped 5.2 percent in November and December for the chain.
Cincinnati-based department store chain Macy’s has announced the elimination of 4,800 jobs and the closure of 40 stores nation-wide as a result of weak holiday sales, according to WGN. Macy’s is the nation’s largest department store chain, and also operates Bloomingdale’s.
The move is a strong sign that retailers are facing a difficult challenge. Ken Perkins, president of retail research firm Retail Metrics, told Canada.com that “I think Macy’s is likely to be a canary in a coal mine,” and that retailers saw an acceleration of the shift towards online and mobile holiday spending during the 2015 season.
According to a Reuters report, the layoffs will affect sales associates, back office and service center positions, and even upper management. The move is intended to save the chain approximately $400 million as a way of offsetting the low sales figures for November and December.
Macy’s Spokesman Jim Sluzewski said that 2,100 of the cuts will be reducing staffing levels at stores, 500 back-office jobs, and 750 call center jobs through consolidation. The remaining 2,710 job cuts will be the result of store closings announced last fall, which includes 40 stores. Four of these stores were already closed last year, and the remaining 36 will close in early spring. Macy’s currently operates approximately 770 stores.
“Our company is committed to operating great Macy’s and Bloomingdale’s stores in the best locations – both to serve shoppers who walk through the door and to fulfill orders that are shipped directly to customers around the country,” Terry J. Lundgren, chairman and CEO of Macy’s Inc., said in a company statement. “In today’s rapidly evolving retail environment, it is essential that we maintain a portfolio of the right stores in the right places. So we will continue to add stores selectively while also being disciplined about closing stores that are unproductive or no longer robust shopping destinations because of changes in the local retail shopping landscape.”
Macy’s is also implementing a “voluntary separation opportunity” for approximately 165 senior executives across Macy’s and Bloomingdale’s organization in spring 2016, with 35 percent of those positions remaining unfilled after retirements.
"In some cases, there will be short-term pain as we tighten our belt and realign our resources," said Lundgren." But our eye is on a long-term vision of Macy's Inc. as a dynamic retailer that serves existing customers and acquires new ones through innovative approaches."
While in-stores sales fell, Lundgren said that the company’s online business is doing well. During November and December, Macys.com and bloomingdales.com filled approximately 17 million online orders, a 25 percent increase over 2014.
