January comparable store sales guidance are forecast to fall 4.7%, compared to its earlier expectations of a 2-3% decline.
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Meanwhile, experts said that the latest warning from Macy’s mirrored the ongoing shifts in the retail industry.
Ken Perkins, president of Retail Metrics, a research firm, said that despite positive results from some stores, he’s still cautious about the fourth-quarter for retailers.
On the cost-efficiency side, beginning in early 2016 the company will reduce SG&A expense by approximately $400 million while still investing in growth strategies, particularly in omnichannel capabilities at Macy’s and Bloomingdale’s. It will cut about 3,000 associate jobs and more back-office and call center positions, as well as create a “voluntary separation opportunity” for 165 senior executives.
After a rough 2015 capped by a grim holiday season sales performance, Lundgren said Macy’s will shutter 40 of its 770 stores by spring 2016.
The closest stores to the Capital Region that are scheduled to close are at the Berkshire Mall in Lanesborough, Mass., and at Hudson Valley Mall in Kingston, N.Y. Macy’s had 166,900 employees at the end of the last fiscal year.
Terry J. Lundgren, Macy’s chief executive, said sales were crimped by unusually warm weather through much of the Northeast and by lower spending in its stores by worldwide tourists due to the strong USA dollar. The Company operates its stores under the names of Macy’s, Bloomingdale’s, Bloomingdale’s Outlet and Bluemercury. Same-store sales in November and December fell 4.7% and the slide continues.
Macy’s Inc. Wednesday announced that it will eliminate about 4,800 positions after releasing a disappointing post-holiday sales report. The company’s shares were two percent up at 36.89 when the market closed for the day.
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Macy’s share price dropped almost 47% past year, one of the worst performing stocks on the S&P 500. Hhgregg, the consumer electronics and home furnishings merchant, reported an 11 percent plunge in sales in the fourth quarter at stores open for at least a year. It has engaged Eastdil Secured, along with assistance from Credit Suisse and Goldman Sachs, to seek potential partnerships or joint ventures for the company’s mall-based properties as well as its flagship real estate assets in Manhattan, Chicago, San Francisco and Minneapolis.
