The announcement was not fully unexpected, as Macy’s announced last fall that there would be some store closings in the new year, USA Today reported. Note that this location was converted to a Macy’s Backstage store.
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Still, Wall Street cheered the belt tightening, bidding Macy’s shares up almost 6% in after-hours trading on Wednesday.
The new information released this week was the list of stores that have either closed or will be closing by spring. A spokesperson told BuzzFeed News the company is not yet sure how many of those workers it can place in other stores. Best Buy closed on October 31 after the company declined to renew its lease with the mall’s management company.
According to Macy’s, the Midway Mall location opened in 1990 and is roughly 105,000 square feet. An average of three to four positions per store will be affected. The Columbia store that opened in 2003 has 81 employees.
The company also said Wednesday that comparable sales fell by 4.7 percent in November and December combined on an owned plus licensed basis.
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.
The company said associates displaced by the closings may be offered jobs in nearby stores if possible, and eligible full-time and part-time employees who are laid off will be offered severance benefits.
It sees fourth-quarter earnings per share at $2.18 to $2.23, compared with the average analyst estimate of $2.56 per share.
Additionally, plans were announced to close a credit and customer services center in St. Louis. A USA strong dollar also continued to weigh on spending from global tourists. “We will continue to invest in strategic initiatives that anticipate emerging customer needs and create shareholder value”, said Terry J. Lundgren, chairman and chief executive officer of Macy’s, Inc.
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The local closings are among 40 stores targeted for shut down following a disappointing holiday season.
