In response to what they are calling a change in consumer shopping, Macy’s Inc. has announced plans to change how it stocks and sells clothing and other items.
Specifically, Macy’s plans to beef up its e-commerce programs and open more outlets. It is also considering a switch in business model to off-price retailing, much like T.J. Maxx and Ross Stores Inc.
“We must continue to invest in our business to focus on where the customer is headed — to prepare for what’s next,” Chief Executive Terry J. Lundgren said in a news release.
The one-time dry-goods retailer expects to see savings of around about $140 million a year, starting in 2015, and result in about $100 million-$120 million in charges in the fourth quarter of 2014. It is estimated that as many as 2 million workers could be affected by the upcoming change in direction, though the business’ total workforce is expected to remain at about 175,000.
Macy’s has cut the number of workers in stores at both eponymously named locations and at Bloomingdale’s, which they also own. Macy’s parent corporation also plans to merge purchasing and selling at retail and online stores for both stores.
In total, 14 stores will close in the early spring 2015, though there will also be some planned openings – including a store expected to open in Abu Dhabi in 2018.
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Sales at existing stores rose 2.7 percent in the nine weeks ending Jan. 3, which is about what was expected from the company in the fourth quarter of 2014.
Online sales drove the growth, particularly at Macy’s and Bloomingdale’s.
Macy’s is scheduled to report results for the quarter on Feb. 24.
