Retailer Macy’s is closing 125 stores – about a fifth of its total – and laying off about 2,000 workers as it struggles to shore up sales after a disappointing holiday season.
The department store chain is also shutting down its second headquarters in Cincinnati and will move operations to New York, the company announced in a statement Tuesday. The company also plans to close offices in San Francisco and Lorain, Ohio, as well as a customer service center in Tempe, Arizona, resulting in a 10 percent reduction of corporate and support staffs.
“The changes we are making are deep and impact every area of the business, but they are necessary,” Jeff Gennette, chief executive of Macy’s, said in a statement. “We are taking the organization through significant structural change to lower costs, bring teams closer together and reduce duplicative work.”
Macy’s, which had $25 billion in sales in 2018, is one of the country’s largest and most prominent retailers, with anchor stores at hundreds of U.S. shopping malls. But changing consumer habits and mounting competition from Walmart, Amazon and Target have been reversing its fortunes. The retail giant has closed dozens of underperforming stores, many of them in shopping malls, over the past four years as it invests in its most lucrative properties. Even so, Macy’s has struggled to win over customers who are increasingly buying online.
The company’s woes come amid continued turmoil in the retail industry. U.S. companies announced a record 9,300 store closures last year, according to Coresight Research, and analysts said they expect that trend to continue into the new year. Dozens of major companies – many of them mall staples such as Gymboree, the Limited and Sears – have filed for bankruptcy in recent years.
Macy’s has experimented with smaller store formats and Backstage outlets. It recently partnered with online reseller ThredUp to sell used clothing at a few dozen of its stores. On Tuesday, the retailer announced yet another new idea: Market by Macy’s, a small-format store that will sell local goods, as well as food and drinks, at “lifestyle” shopping centers around the country. The first Market store is schedule to open in Dallas this week.
In addition to about 600 Macy’s and Bloomingdale’s stores, the company operates 171 Bluemercury beauty shops and has been building its Macy’s Backstage outlets. The company’s “Story” concept stores, meanwhile, offer a range of experiences, including yoga classes and cooking workshops aimed at attracting younger shoppers who do most of their buying online.
Shares of Macy’s stock fell slightly, about 0.12 percent, after the news.
Comments are not available on this story.
Send questions/comments to the editors.