US retailer Macy's to cut 10,000 jobs

Mr Lundgren said Macy's was closing stores that were unproductive or are no longer robust shopping destinations.
Mr Lundgren said Macy's was closing stores that were unproductive or are no longer robust shopping destinations.

NEW YORK • Struggling with sagging sales over another crucial holiday shopping season, Macy's has announced that it was eliminating more than 10,000 jobs as part of a continuing plan to cut costs and close 100 stores.

Macy's, the United States' largest department store chain, said on Wednesday that sales at its stores had fallen 2.1 per cent in November and last month, compared with the same period in 2015.

Chairman and chief executive Terry Lundgren said in a statement that while the trend was "consistent with the lower end of our guidance, we had anticipated sales would be stronger".

He attributed the decline to "broader challenges" facing much of the retail industry. Consumers have turned to low-cost chains like TJ Maxx and shifted their spending away from brick-and-mortar stores for the convenience of online shopping.

The announcement continued a trend for Macy's, which announced last January that it was eliminating about 4,500 jobs in a major restructuring. Then, too, it said slumping holiday season sales had hurt its bottom line.

The retailer, which now has 730 stores, announced in August it would close 100 of them. On Wednesday, it identified 68 stores to be closed. Of the 68, three were closed by mid-2016, 63 will close in the next three months and two will be closed by the middle of this year. Macy's said it planned to close about 30 other stores over the next few years.

Some employees may be offered positions at nearby stores, but Macy's estimated that 3,900 would be affected by the closings. It also said it planned to restructure parts of its business, leading to a reduction of an additional 6,200 jobs. Overall, the job cuts represent about 7 per cent of its workforce.

Macy's estimated the changes would save US$550 million (S$788.6 million) a year, starting this year.

Mr Lundgren said the company was closing stores that were "unproductive or are no longer robust shopping destinations because of changes in the local retail shopping landscape".

The company, which owns the Macy's and Bloomingdale's brands, has been struggling with declining traffic in its stores, where the bulk of its business is still conducted. It plans to invest some of its savings in expanding its digital business.

NYTIMES

A version of this article appeared in the print edition of The Straits Times on January 06, 2017, with the headline 'US retailer Macy's to cut 10,000 jobs'. Print Edition | Subscribe