Wednesday, 15 January 2014
Macy’s to go Leaner by Shutting Five Stores and Cutting 2,500 Jobs
Nearly 2,500 employees of Macy’s are likely to face the axe in the coming days, with the company also deciding to down the shutters on five of its stores. At the same time, Macy’s announced that it will be consolidating and restructuring its regional management and merchandise planning employees.
The company feels that it can potentially improve efficiency in certain specific areas, without having to compromise its customer service levels. Macy’s CEO Terry Lundgren said that the company will continue to address the evolving needs of its customers even as it makes improvements in specific areas.
According to Macy’s, these changes that it plans to bring about, are likely to help the company save up to USD 100 million annually. This news sent sheers among investors and as a result, the company’s shares saw a 6.4% spike in after-hours trading.
According to industry analysts, this decision by Macy’s is what one would expect from a management that’s heads up. This is being hailed as a proactive and favorable step.
Once the changes have taken effect, Macy’s would be operating 844 stores in all that would employ approximately 175,000 associates. Earlier, in 2012 and 2013, the company had announced that it had eight new stores on the cards. But these stores are still either in the planning stage or are being constructed.
On the day Macy’s made this announcement, its rival J.C. Penny’s stocks had sunk over 10% post the retailer’s release of an ambiguous statement about its holiday season sales performance. J.C. Penny’s statement simply stated that though the company was ‘pleased’ with its holiday season sales, it did not give away any figures reflecting the same.