Macy’s Inc is slashing jobs, a harbinger of hard times for retailers after a holiday season that saw a noticeable shift to online shopping and away from physical stores.
The US’ largest department store chain, which also operates Bloomingdale’s, said late on Wednesday that it is cutting up to 4,800 jobs and trimming its profit outlook after a miserable holiday season.
“I think Macy’s is likely to be a canary in a coal mine,” said Ken Perkins, president of Retail Metrics, a retail research firm.
Photo: AP
He said retailers witnessed an acceleration of the shift toward online and mobile holiday spending last year.
About 2,110 of the job cuts at Macy’s will come from reducing staffing at stores, eliminating duplications in back-office operations and consolidating regional store groups. The remaining 2,710 job cuts will come from the store closings that Macy’s announced last fall, spokesman Jim Sluzewski said.
As of Wednesday, Macy’s had about 163,000 workers.
The moves are part of Macy’s ongoing campaign to position itself to compete in a retail world where increasingly demanding shoppers are going back and forth between stores and their mobile devices.
Analysts expect more retailers to announce they are shrinking their store counts further and making other moves to make their organizations leaner.
With store traffic down, outlets had to discount more. The weather also hurt holiday sales, particularly at clothing stores. Unseasonably warm weather in some regions in the US squelched shoppers’ demand for cold-weather goods.
Perkins expects fourth-quarter earnings to increase a meager 0.3 percent for the 119 retailers he tracks, compared with a 12.5 percent increase in the same period a year earlier.
Macy’s, which has corporate offices in Cincinnati and New York, says sales at existing stores and excluding licensed departments fell 5.2 percent in November and last month.
“In some cases, there will be short-term pain as we tighten our belt and realign our resources, but our eye is on a long-term vision of Macy’s Inc as a dynamic retailer that serves existing customers and acquires new ones through innovative approaches,” Macy’s chairman and chief executive Terry Lundgren said in a statement.
Lundgren said that the company is buoyed by a strong performance in its online business. In the final two months of last year, Macys.com and bloomingdales.com filled nearly 17 million online orders, up 25 percent from the same period a year earlier.
The company on Wednesday also listed which 40 Macy’s stores it would close or had closed. Before the closures, the company had 770 stores under the Macy’s name in the US.
Macy’s said that it now expects its profit for its fiscal fourth quarter and full year, which runs through this month, to fall short of its previous estimate.
The company’s shares rose more than 3 percent to US$37.4 in extended trading on Wednesday, after falling more than 2 percent to US$36.15 in regular trading. Macy’s shares have lost more than 44 percent in the past 12 months
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