Macy’s set to cut 4,500 jobs after sales slump

Macy’s said on Wednesday that it would eliminate about 4,500 jobs, or about 3 percent of its work force, in a major restructuring drive. It said slumping holiday season sales had hurt its bottom line. The department store chain’s holiday woes were a harbinger of what could be a difficult winter for retailing. The consumer electronics and home furnishings merchant Hhgregg reported an 11 percent plunge in sales in the fourth quarter at stores open for at least a year. Macy’s said sales at its Macy’s and Bloomingdale’s stores fell 4.7 percent in November and December, partly because unseasonably warm weather across much of the country discouraged shoppers from buying coats and other outerwear. The company also blamed a stronger dollar, saying that weighed on spending by international tourists, TheNewYorkTimes reports.
“The holiday selling season was challenging, as experienced throughout 2015 by much of the retailing industry,” Terry J. Lundgren, Macy’s chairman and chief executive, said in a statement.
Four-fifths of the company’s sales declines could be traced to a drop in demand for coats, sweaters, boots, hats, gloves and scarves, Mr. Lundgren said. The problems facing traditional retailers contrast starkly with the online juggernaut Amazon, which announced a record-breaking holiday sales season. Macy’s has struggled to compete with heavy discounters like T. J. Maxx, as well as so-called fast fashion brands like H&M and Zara.
Macy’s aims to save $400 million a year from various cutbacks and a streamlining of its store operations into five regions, down from seven. About 3,000 of the jobs being eliminated are store employee positions, the retailer said, while 165 senior executive posts are being trimmed. It will also cut 650 back-office jobs, and close a call center in St. Louis. The retailer said that it would also push ahead with the previously announced closing of 36 stores in the early spring. Macy’s operates about 900 stores in the United States.