Macy’s to axe thousands of jobs in cost-cutting move
The company plans to lay off approximately 4,500 workers: 3,000 in its stores, 165 senior executives, 600 back-office employees, and 640 in its call centers. It also said that, the company is considering some options for its real estate.
Earnings per share for the full-year 2015 now are expected in the range of $3.85 to $3.90, excluding expenses related to cost efficiencies announced today and asset impairment charges associated primarily with spring 2016 store closings.
Macy’s hopes to save about $400 million with shutting down the stores.
Macy’s stock last traded at $36.14, down 2.22%, as of Wednesday, December 6. Warm weather and lower spending by worldwide tourists hurt sales.
The move follows a same-store sales decline of 4.7 percent in November and December, reflecting a dismal holiday season for department stores.
“The holiday selling season was challenging, as experienced throughout 2015 by much of the retailing industry”, Terry Lundgren, Macy’s chairman and chief executive, said in a statement.
Four locations closed before the end of 2015, with the remaining 36 closing in the next few months.
The South Plainfield Macy’s store is the oldest operating department store in South Plainfield.
The store made the announcement on their website, saying the Horseheads based store will close in April.
Overall, Macy’s is not expecting a major change in sales trends in January and expects a comparable sales decline on an owned plus licensed basis in the fourth quarter to account for the November/December numbers.
Macy’s, Inc. (NYSE:M) had its price objective trimmed by Nomura from $53.00 to $50.00 in a report published on Thursday morning, Analyst Ratings.Net reports. Before the closures, the company had 770 stores under the Macy’s name in the U.S.
They said due to the reduction in foot traffic at the mall, they saw it coming, even though they were told the store was performing better than any other in its region, with many employees meeting their sales goals.
Macy’s has faced significant pressure from activist shareholders amid the sluggish sales run. Macy’s Enfield Square furniture and men’s store will also be closed, eliminating 20 jobs. “Moreover, we believe we can operate more effectively with an organization that is flatter and more agile so we can pursue growth and regain market share”.