Stores slated to close include locations in Los Angeles, West Palm Beach (Florida), Nashville, (Tennessee), and St Louis, among others. Cincinnati-based Macy's says the closures will cost about US$65 million (S$96 million), most of which will be booked in the 2008 fourth quarter.

'These closings are part of our normal-course process to prune underperforming locations each year in order to maintain a healthy portfolio of stores,' said Macy's Chief Executive Terry J. Lundgren in a statement.

Employees at the stores that are closing may be considered for open positions at other Macy's stores, the company said.

US department-store operators have been among the harder-hit in the retail sector as consumers cut back amid the recession, hunting for bargains and trading down to discounters.

Macy's reported on Thursday that its December sales at stores open at least a year, or same-store sales, fell 4 per cent - still not as bad as the 5.3 per cent drop analysts surveyed by Thomson Reuters were expecting.

Total sales for the five-week period ended Jan 3 fell 5 per cent to US$4.4 billion from US$4.61 billion last year.

Same-store sales fell 7.5 per cent during the combined November and December holiday period. Macy's said the holiday season ended with improving sales in the fourth and fifth weeks of December but that sales were sluggish before that.

The company said it marked items down sharply in the fourth quarter to gain sales and reduce its inventories, but that hurt its margins and led it to lower its profit forecast for the fourth quarter and full year.

Macy's now expects earnings of 90 cents to US$1 per share in the fourth quarter, down from its previous guidance of US$1.10 to US$1.30 per share. Analysts expect earnings of US$1.11 per share.

For the full year, the company now expects to earn US$1.10 to US$1.20 per share, down from its previous forecast of US$1.30 to US$1.50 per share. -- AP