Macy's to close stores, cut jobs amid weak sales
Macy's says it is eliminating more than 10,000 jobs and plans to move forward with 68 store closures.
By SARAH SKIDMORE SELL, AP Business Writer
Macy's says it is eliminating more than 10,000 jobs and plans to move forward with 68 store closures after a disappointing holiday shopping season. The department store chain also lowered its full-year earnings forecast.
The retailer said Wednesday that sales at its established stores fell 2.1 percent in November and December compared to the same period last year. Macy's Inc. pointed to changing consumer behavior and said its performance reflects the challenges that are facing much of the retail industry.
As if to underscore that point, Kohl's Corp. also reported disappointing holiday shopping numbers Wednesday.
Macy's said the 68 store closures, which span the nation, are part of the 100 closings it announced in August. Of the 68, three were closed by the middle of 2016, 63 will close in the spring and two will be closed by the middle of 2017.
Some employees may be offered positions at nearby stores, but Macy's estimates that 3,900 employees will be affected by the closures.
Macy's also said it plans to restructure parts of its business and sell some properties. This will lead to the reduction of 6,200 jobs. The moves are estimated to save $550 million annually.
The company, which has been under pressure from investors to sell some of its valuable real estate, is selling or has sold three locations. It is leasing the properties back and will keep operating those stores.
Overall, Macy's said, the job reductions represent about 7 percent of its workforce.
The company, which owns the Macy's and Bloomingdale's brands, has been struggling with declining traffic in its stores, where the bulk of its business is still conducted.
Longtime CEO Terry Lundgren, who is stepping down early this year and will be succeeded by Macy's President Jeff Gennette, said in a statement the company is closing stores that are "unproductive or are no longer robust shopping destinations" as well as selling those with highly valued real estate.
Macy's has seen sales growth slow as it and other traditional department store chains face competition from online and off-price rivals. It has tried new ways to attract shoppers, such as by offering more exclusive products, designating areas featuring "smart watches" and launching an Apple shop at its flagship New York store in Herald Square.
The company said Wednesday it plans to invest some of its savings in growing its digital business.
It said it now expects to earn between $2.95 and $3.10 per share on an adjusted basis for its 2016 fiscal year, versus its prior forecast of $3.15 to $3.40 per share. The company is scheduled to report full results in February.
Shares in Macy's fell more than 10 percent to $32.20 in after-hours trading.
Kohl's shares fell almost 15 percent to $44.15 after it cut its earnings guidance for fiscal 2016. It now expects $3.60 to $3.65 a share on an adjusted basis, down from its previous forecast of $3.80 to $4.00 per share.
Macy's said Wednesday that it is moving forward with 68 store closures, which are part of the 100 closings it announced in August. Here's a look at the recently closed and soon-to-close locations.
Closed in 2016
- Laurel Plaza, North Hollywood, California
- Ala Moana Jewel Gallery, Honolulu, Hawaii
- Valley Fair, West Valley City, Utah
- Closings slated for early 2017
- Greenwood, Bowling Green, Kentucky
- Carolina Place, Pineville, North Carolina
- Douglaston, Douglaston, New York
- Downtown Portland, Portland, Oregon
- Lancaster Mall, Salem, Oregon
- Oakwood Mall, Eau Claire, Wisconsin
Anticipated year-end closings
- Mission Valley Apparel, San Diego, California
- Paseo Nuevo, Santa Barbara, California
- Lakeland Square, Lakeland, Florida
- Oviedo Marketplace, Oviedo, Florida
- Sarasota Square, Sarasota, Florida
- University Square, Tampa, Florida
- CityPlace, West Palm Beach, Florida
- Georgia Square, Athens, Georgia
- Nampa Gateway Center, Nampa, Idaho
- Alton Square, Alton, Illinois
- Stratford Square, Bloomingdale, Illinois
- Eastland, Bloomington, Illinois
- Jefferson, Louisville, Kentucky
- Esplanade, Kenner, Louisiana
- Bangor, Bangor, Maine
- Westgate, Brockton, Massachusetts
- Silver City Galleria, Taunton, Massachusetts
- Lakeview Square Mall, Battle Creek, Michigan
- Eastland Center, Harper Woods, Michigan
- Lansing, Lansing, Michigan
- Westland, Westland, Michigan
- Minneapolis Downtown, Minneapolis, Minnesota
- Northgate, Durham, North Carolina
- Columbia, Grand Forks, North Dakota
- Moorestown, Moorestown, New Jersey
- Voorhees Town Center, Voorhees, New Jersey
- Preakness, Wayne, New Jersey
- Cottonwood, Albuquerque, New Mexico
- Las Vegas Boulevard, Las Vegas, Nevada
- Great Northern, Clay, New York
- Oakdale Mall, Johnson City, New York
- The Marketplace, Rochester, New York
- Eastland, Columbus, Ohio
- Sandusky, Sandusky, Ohio
- Fort Steuben, Steubenville, Ohio
- Promenade, Tulsa, Oklahoma
- Neshaminy, Bensalem, Pennsylvania
- Shenango Valley, Hermitage, Pennsylvania
- Beaver Valley, Monaca, Pennsylvania
- Lycoming, Muncy, Pennsylvania
- Plymouth Meeting, Plymouth Meeting, Pennsylvania
- Washington Crown Center, Washington, Pennsylvania
- Parkdale, Beaumont, Texas
- Southwest Center, Dallas, Texas
- Sunland Park, El Paso, Texas
- Greenspoint, Houston, Texas
- West Oaks Mall, Houston, Texas
- Pasadena Town Square, Pasadena, Texas
- Collin Creek, Plano, Texas
- Broadway Square, Tyler, Texas
- Layton Hills, Layton, Utah
- Cottonwood, Salt Lake City, Utah
- Landmark, Alexandria, Virginia
- River Ridge, Lynchburg, Virginia
- Everett, Everett, Washington
- Three Rivers, Kelso, Washington
- Valley View, La Crosse, Wisconsin
Other 2017 Closings
- Simi Valley Town Center (men's/home/kids), Simi Valley, California
- Mall at Tuttle Crossing (furniture/home/kids/men's), Dublin, Ohio
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