The holiday sales weren’t too kind to Macy’s this year. Sales for the retailer fell by two percent between the months of November and December. Macy’s sales earnings were $2.95 to $3.10 which is lower than the $3.15 to $3.40 the company expected.
To improve their sales performance, the company plans to close nearly sixty-eight stores. Along with closing stores, Macy’s strategy is to remove management. The company will terminate over 6,200 workers. To cut non-payroll costs, Macy’s also plans to reallocate or let go of, at least 3,900 other workers.
These closures can save Macy’s a predicted $550 million starting this year. The closures, however, were part of plans made in August to get rid of a large amount of store locations in efforts to reverse the sales drop.
With the $550 million, Macy’s will save in eliminations, the company can invest about $250 million in other ventures. Macy’s announced more Bluemercury beauty shops coming to existing stores. Macy’s also says it wants to focus more on China as well as Backstage stores.
The company, however, isn’t the only retailer suffering from diluted sales. Kohl’s recorded a drop in their sales as well. They received between $2.92 and $2.97, which is lower than the estimated $3.12 to $3.32. Yet it seems that a drop in department stores sales is due to the mass surge in online shopping.
The retailer closed three out of the sixty-eight stores in the middle of the year. Two will close in the middle of 2017, and sixty-three will close in the spring. The company hopes to maintain sales on the internet and in existing stores, as the mass closure will cause Macy’s to lose about $575 million.
Once their lease is up, thirty more stores will shut their doors. The company called the stores “unproductive”. Macy’s decision is to eradicate locations that are “no longer robust shopping destinations.”
Macy’s may be closing many locations, but they will be opening a new Bloomingdale’s in Kuwait. There is also going to be a new Bloomingdale’s and Macy’s coming to the United Arab Emirates later in 2018.
A few of the stores closing are as follows:
Year-end closings
- Mission Valley Apparel, San Diego, CA (385,000 square feet; opened in 1961; 140 associates);
- Paseo Nuevo, Santa Barbara, CA (141,000 square feet; opened in 1990; 77 associates);
- Lakeland Square, Lakeland, FL (101,000 square feet; opened in 1995; 68 associates);
- Oviedo Marketplace, Oviedo, FL (195,000 square feet; opened in 2000; 83 associates);
- Sarasota Square, Sarasota, FL (143,000 square feet; opened in 1977; 86 associates);
- University Square, Tampa, FL (140,000 square feet; opened in 1974; 73 associates);
- CityPlace, West Palm Beach, FL (108,000 square feet; opened in 2000; 72 associates);
- Georgia Square, Athens, GA (121,000 square feet; opened in 1981; 69 associates);
A complete list can be found on CNBC.
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