Over 10K will be on the chopping block as recently embattled retailer Macy’s gears up for its next round of layoffs and store closures.
The holiday season, the data indicates, was not as holly or as jolly as Macy’s would have liked — sales dropped, and as of yesterday, Macy’s announced that it will close down another 68 stores and cut an additional 6,200 jobs.
Some of those closings — nine, to be exact — had already been announced, and three have actually already been shut down. The remaining 59 stores, however, will be closed down by the middle of 2017. The move will affect some 3,900 additional employees — though some will be offered positions at different locations where available.
Some of the closing down locations are actually fairly new — a store in Eastland Center in Columbus, Ohio has only been around since 2006 for example. But some of the shut-downs will be historic spots for Macy’s — downtown Minneapolis’ store opened in 1902, and 280 employees will be let go when the location shutters.
Additionally, the retail giant says that it will be cutting “layers of management” at its central operations and paring the number of managers supporting stores, making up the bulk of 6,200 jobs that will be lost.
“We continue to experience declining traffic in our stores, where the majority of our business is still transacted,” Terry Lundgren, Macy’s CEO said in a statement. In regard to the store closings he added, “we are closing locations that are unproductive or are no longer robust shopping destinations due to changes in the local retail shopping landscape. . . .These are never easy decisions.”
Investors were, unsurprisingly, less than soothed by Macy’s shrinking footprint — shares fell 8.7 percent to $32.70 in pre-market trading today (January 5).
“It’s a big reduction in space and a lot of stores aren’t pulling their weight,” says Neil Saunders, analyst for Conlumino, a firm that follows the retail industry, who called the action “harsh, but necessary.” Saunders also noted the smart next step for Macy’s is optimizing their more productive remaining store assets.
“In stores where they think they have potential, they will invest more. That is the right direction. They want to make sure the ones they have are really great stores, and that requires money.”
And patience, Saunders noted — because Macy’s could very well have some very deep cuts left to make.
“I don’t think this is the end of it,” he adds.