US retailer Macy’s announces 125 store closures and 2,000 job cuts
Macy’s job cuts : US upscale department store chain Macy’s intends to close around 125 stores in lower-tier malls during the next three years owing to their low profitability, resulting in nearly 2,000 job losses.
Macy’s store closure update
The stores to be closed include nearly 30 that are already in the process of being shuttered. Macy’s decision to reduce its stores will result in the removal of nearly 2,000 roles.
The proposed closure is part of Macy’s three-year Polaris strategy that is aimed at stabilizing profitability and to position the retailer for growth.
The annual sales reported by the stores to be closed are nearly $1.4 billion.
Apart from the store closures, the upscale department store chain will relocate its headquarters from San Francisco to New York City and close certain other offices.
Rationale behind the Macy’s store closure announcement
Macy’s said that it had conducted an extensive evaluation of its store portfolio including a store-level assessment of each store’s value and estimated profitability which led to the proposed store closures.
Jeff Gennette – Macy’s chairman and CEO, commenting on Macy’s store closure announcement and Macy’s job cuts, said: “We are taking the organization through significant structural change to lower costs, bring teams closer together and reduce duplicative work. This will be a tough week for our team as we say goodbye to great colleagues and good friends.
“The changes we are making are deep and impact every area of the business, but they are necessary. I know we will come out of this transition stronger, more agile and better fit to compete in today’s retail environment.”
Macy’s new store format
Concurrently, Macy’s is testing out a new store format called Market by Macy’s, which will be located off-mall in lifestyle centers. Market by Macy’s will be smaller than the average store format of Macy’s, and will store a mix of the retailer’s merchandise and local food and beverage options.
The first Market by Macy’s store had opened in Dallas earlier this month.
Macy’s also revealed plans to upgrade up to 100 stores in the current year. The upgrade stores will see technological improvements and investment in merchandising strategies and in talent and local marketing.