Macy’s, the iconic American department store, has announced plans to cut jobs and close several of its stores as part of its turnaround strategy. The company will reduce its workforce by approximately 3.5% and shut down five of its namesake mall locations. These measures come as Macy’s aims to trim costs and address slowing sales in the face of changing consumer preferences and increased competition from online retailers like Amazon and Shein, as well as big-box players like Target.
The job cuts will affect around 2,350 positions across Macy’s corporate office and stores. The company stated that the decision was made to become a more streamlined organization in order to meet the evolving needs of consumers and the marketplace. Employees were notified about the layoffs on Thursday, and the last day for impacted employees will be January 26.
The five stores that will be closed are located in Arlington, Virginia; San Leandro, California; Lihue, Hawaii; Simi Valley, California; and Tallahassee, Florida. These closures are expected to take place in early 2024. Macy’s is focusing on transforming its brand to resonate with consumers who prefer online shopping and seek value in their purchases. The company is revamping its private label brands, opening smaller shops outside of malls, and relying on its beauty chain, Bluemercury, and higher-end department store, Bloomingdale’s, to drive growth.
In an effort to reach suburban consumers who often visit outdoor shopping centers for their retail needs, Macy’s plans to open up to 30 smaller stores in strip malls over the next two years. This marks a departure from the company’s traditional strategy of operating large stores in malls. Macy’s is adapting to changing consumer behavior and aiming to provide a more enjoyable shopping experience that delivers relevant products and strong value.
Furthermore, Macy’s will soon have a new leader at the helm. Tony Spring, the current CEO of Bloomingdale’s, will take over as CEO of Macy’s in early February, replacing outgoing CEO Jeff Gennette, who is retiring. This leadership change is expected to bring fresh perspectives and strategies to drive the company’s growth.
Macy’s sales and stock performance have been underwhelming, with the company expecting same-store sales to decline by up to 7% for its fiscal year 2023. The company’s shares have also experienced a decline of nearly 11% so far this year. Macy’s has 723 locations across the United States, with the majority being its namesake stores. However, the company has been reducing its store count in recent years. In 2020, Macy’s announced the closure of 125 stores and the elimination of 2,000 corporate jobs. The company is now reevaluating its store count once again to adapt to the changing retail landscape.
Despite these challenges, Macy’s remains committed to providing inspiration to its customers and achieving long-term profitable growth. The company is determined to stay relevant in the ever-evolving retail industry and meet the demands of modern consumers. With its new leadership, strategic initiatives, and focus on optimizing its physical footprint, Macy’s aims to regain its position as a leading retailer in the United States.
