Macy’s to cut 4500 jobs after holiday sales slump

They said that apparel industry faces significant pressures in 2016, including declining mall traffic and increased consumer spending online.

Macy’s and these three department stores account for 4.4% of the SPDR S&P Retail ETF (XRT).

Macy’s says the cuts will reduce expenses by about $400 million in 2016. About 3,000 of the jobs being eliminated are store employee positions, the retailer said, while 165 senior executive posts are being trimmed.

Macy’s announced Wednesday it is going to layoff over 4,350 employees across the country, closing 36 stores in the spring.

Macy’s had been a stellar performer since the recession as it localized merchandise, cut costs and developed exclusive brands that set itself apart from others.

Macy’s will be the second anchor store to close at the Hudson Valley Mall in less than a year. Mother Nature also hurt holiday sales, too, particularly at clothing stores.

The department store chain, which is closely associated with the holiday season, said comparable sales for November and December 2015 dropped 4.7% compared with the previous year.

Macy’s also pointed to the impact of the strong USA dollar, which has caused worldwide tourists to spend less.

Macy’s, like other retailers, blamed the unusually warm holiday season for its decline in sales, noting that roughly 80 percent of its losses are attributable to shortfalls in traditional winter attire such as coats, sweaters, hats, gloves and scarves.

The Akron location on Brittain Road, near the Cuyahoga Falls border, is one of two stores in OH that Macy’s will close.

Macy’s also operates stores at Summit Mall in Akron and in Stow, where there is a free-standing store on the Kent Road site of Stow-Kent Shopping Center.

Gap’s shares fell more than 8 percent, or $2.22, to $24.52 in after-hours trading when the news was announced.

“In light of our disappointing 2015 sales and earnings performance, we are making adjustments to become more efficient and productive in our operations”, explained chairman and CEO Terry Lundgren.

Macy’s stock last traded at $36.14, down 2.22%, as of Wednesday, December 6. He now expects quarterly profits to rise 0.1 percent, down from growth of 5 percent three months ago, as more retailers are forced to slash prices.