Its shares have fallen 8 percent over the past year. The company mentioned that for the retailing industry, the challenging holiday season was the reason behind the decline.
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Macy’s and these three department stores account for 4.4% of the SPDR S&P Retail ETF (XRT).
The company said it plans to cut costs by approximately $400 million as a result of the store closures.
An additional 600 jobs will be lost in back-office operations, while 750 workers will go through the closing of a call centre.
A total of 36 stores will close – the majority in early spring, the company announced.
Macy’s shares were up more than 3% in after-hours trading as investors digested the news of the cost savings.
Other companywide changes outlined in an announcement from the retailer this afternoon include adjusting staffing levels at Macy’s and Bloomingdale’s stores, a move that should trim about 3,000 jobs nationally. He pointed to Finish Line as an example, which said Thursday that it will close a quarter of its stores over the next four years. Others may tear down the vacant Macy’s stores and build multifamily or limited-service hotels, he said. On Wednesday, Macy’s revealed its plans to lay off about 4,350 employees and to shut down 40 stores across the country due to its disappointing holiday sales. The rise in comparable store sales equaled a 7.6% two-year stack of comparable store sales for the same time period, the company said. “We also continued to feel the impact of lower spending by worldwide tourists as the value of the dollar remained strong”, said Terry Lundgren, Macy’s chairman and chief executive officer.
On Wednesday, some employees who have worked for the store for several years told HVNN.com that they were informed by management at the beginning of their shifts on Wednesday morning.
Macy’s also said it will consolidate its existing stores into five regions and 47 local districts (down from seven regions and 58 local districts currently), as well as other field support functions.
The company now operates about 770 Macy’s stores.
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Macy’s Inc. (NYSE: M) had a tough run over the holiday season and the company suffered, but no one thought that it might be this bad. He now expects quarterly profits to rise 0.1 percent, down from growth of 5 percent three months ago, as more retailers are forced to slash prices.
