Macy's to cut jobs, shut stores after weak US holiday season

Shoppers are seen outside Macy's Herald Square in midtown Manhattan.
Shoppers are seen outside Macy's Herald Square in midtown Manhattan. PHOTO: AFP

NEW YORK (AFP) - Macy's will slash jobs and close dozens of stores in a bid to save US$400 million (S$574.3 million) in 2016 following a disappointing holiday shopping season, it said on Wednesday (Jan 6).

The US department store chain outlined steps that will reduce its headcount by about 2,100 and make it more "agile", as it feels the pinch from the growth of online shopping.

These include measures to cut three or four employees from all 770 stores for a total of about 3,000 jobs, about half of which are expected to be placed elsewhere in the company, which also plans to shut a call centre in St Louis.

Macy's listed 40 stores that will be closed in 2016. The retail giant has said it needs a smaller physical footprint due to the shift of some consumers to online shopping.

"In light of our disappointing 2015 sales and earnings performance, we are making adjustments to become more efficient and productive in our operations," said Macy's chief executive Terry Lundgren.

"We believe we can operate more effectively with an organisation that is flatter and more agile so we can pursue growth and regain market share in our core Macy's and Bloomingdale's omnichannel businesses faster and with more intensity."

Macy's, in a separate announcement, said comparable sales declined 4.7 per cent in November and December due in large part to unseasonably warm weather that depressed demand for coats and other seasonal items.

Macy's now expects full-year earnings of US$3.85-US$3.90 per share, down from the prior forecast for US$4.20-US$4.30 per share.

Shares of Macy's rose 3.3 per cent in after-hours trade to US$37.35.