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Financial Reporting

Holiday comps up but Macy’s laying off thousands

January 09, 2014

New York--Despite what its CEO described as a “successful” holiday season, Macy’s announced Thursday it would lay off about 2,500 employees as it trims central office staff and closes stores.

In November and December, Macy’s same-store sales, which include online sales, increased 4 percent. Total sales were up 4 percent as well.

“Even in a questionable macroeconomic environment with challenging weather in multiple states, the positive response from our customers during the holiday season is yet another vote of confidence that our well-established strategies continue to work for us,” Chairman, President and CEO Terry Lundgren said.

Despite what the retailer described as a successful holiday, Macy’s said Wednesday that it has identified areas where it can “improve efficiency,” trimming central office, administrative and back-of-house expenses through layoffs and other cost-saving measures.

A Macy’s spokesperson said the total number of layoffs is expected to be about 2,500, though it is unknown at this point how many additional employees will lose their jobs as a result of the store closures. Macy’s said it will try to place associates in other positions where possible.

The Macy’s stores scheduled to be closed are in Fiesta Mall in Mesa, Ariz., Metcalf South Shopping Center in Overland Park, Kansas, Jamestown Mall in Florissant, Mo., Medley Centre in Irondequoit, N.Y. and Fashion Place Mall in Murray, Utah.

Going-out-of-business sales will begin Monday at these stores and run for 10 to 11 weeks, until they shutter in early spring. The Fashion Place Mall location will close on Sunday with no clearance sale.

Even as these five stores close, the company plans to open five new or replacement Macy’s stores as well as three Bloomingdale’s locations, as previously announced. In addition, the retailer will hire for online operations, direct-to-consumer fulfillment at these new stores.

The new Macy’s stores are in University Town Center in Sarasota, Fla., Shops at Summerlin in Las Vegas, Mall at Bay Plaza in Bronx, N.Y., Plaza Del Caribe in Ponce, Puerto Rico and the Mall at Miami Worldcenter in Miami.

The new Bloomingdale’s stores are in the Stanford Shopping Center in Palo Alto, Calif., Ala Moana in Honolulu and the Mall at Miami Worldcenter.

Once the changes are implemented, Macy’s will have a total of 844 Macy’s and Bloomingdale’s stores in 45 states, the District of Columbia, Puerto Rico and Guam.

Macy’s is scheduled to report its fourth quarter earnings on Feb. 25. The company has lowered its expectations slightly for the period to a maximum of 3 percent same-store sales growth, down from 4 percent.