Macy’s struggles continue as customer habits change to discount stores and online purchases, and the company said it’s going to close 125 department stores through the next three years, saying that about one-fifth of all its locations need to be shuttered, according to a report Tuesday (Feb. 4) by The Wall Street Journal.
About 10 percent of corporate and support staff will be fired, which equals roughly 2,000 corporate jobs. The company will get rid of its dual headquarters in Cincinnati, and it will move everything to New York.
The company plans to continue to restructure and attempt to come back from a slump that has lasted more than a year.
“Our goal is to reclaim and revitalize what a department store should be,” Macy’s Chief Executive Jeff Gennette said in a published interview. “Department stores are still vital if they are done right. There is viability to having many categories and brands under one roof.”
The company said that the restructuring will cost about $480 million but that it’s going to save $1.5 billion by the end of 2022, and save some $600 million in the current fiscal year.
Macy’s is also closing tech offices in San Francisco, according to CNBC. The company will offer severance to the office’s staff, and some employees will be allowed to transfer. Some jobs are moving to New York City.
“We believe these changes will eliminate any duplication of efforts, bringing these teams closer to our business teams and strategy,” a spokeswoman said.
The company added that 20 stores in the San Francisco area would be kept.
Macy’s shares were up 1.5 percent on Tuesday (Feb. 4), following the news.
PYMNTS CEO Karen Webster recently wrote about the decline of mall and retail store foot traffic along with the rise of bankruptcies and closing of retail store locations.
More customers, she argues, want more convenience in their shopping preferences and the old brick-and-mortar locations are slow to change, and subsequently have to face the consequences of an evolving retail landscape.
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