Macy's to shut 125 stores, cut 2,000 jobs over 3 years

Shoppers crowding a Macy's store in New York on Black Friday last year. The US retailer has struggled with the decline of the once-dominant shopping mall, and competition from Amazon. The company said the savings generated by its plan to streamline o
Shoppers crowding a Macy's store in New York on Black Friday last year. The US retailer has struggled with the decline of the once-dominant shopping mall, and competition from Amazon. The company said the savings generated by its plan to streamline operations will be invested in improving the digital business, among other things. PHOTO: AGENCE FRANCE-PRESSE

WASHINGTON • Iconic American department store chain Macy's will shutter 125 stores and slash 2,000 jobs over the next three years as part of a plan to shore up its financial position, the company announced on Tuesday.

Like other retailers, Macy's has struggled with the decline of the once-dominant American shopping mall, as well as competition from online behemoth Amazon.

The department store said it expects the "Polaris" strategy to generate annual gross savings of approximately US$1.5 billion (S$2.1 billion) once it is fully implemented by the end of 2022, with savings of approximately US$600 million this year.

"We are confident in our Polaris strategy, and we have the resources required to return Macy's, Inc to sustainable, profitable growth," Macy chief executive and chairman Jeff Gennette said in a statement.

"We will focus our resources on the healthy parts of our business, directly address the unhealthy parts of the business, and explore new revenue streams."

The company will close approximately 125 of its "least productive" stores over the next three years, which account for US$1.4 billion in annual sales. They include 30 stores already in the process of closure, the statement said.

In addition, the New York office will become the company's sole corporate headquarters, and the chain will close its San Francisco and Cincinnati offices.

The plan calls for "streamlining its organisation with a net reduction in its corporate and support function headcount of 9 per cent, or approximately 2,000 positions," the company said.

The savings generated by the programme will be invested in improving the digital business and "off-mall expansion", and new, smaller store formats, among other things.

The cost of the restructuring is expected to total approximately US$450 million to US$490 million, the majority of which will be recorded in 2019, the statement said.

AGENCE FRANCE-PRESSE

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A version of this article appeared in the print edition of The Straits Times on February 06, 2020, with the headline Macy's to shut 125 stores, cut 2,000 jobs over 3 years. Subscribe