Macy's has created a reorganization plan and it includes closing five stores and cutting 2,500 jobs.
Currently Macy's has 840 stores in 45 states either under the Macy's name or Bloomingdale's name with approximately 175,000 employees. Soon they will close down stores in Arizona, Kansas, Missouri, New York, and Utah.
Though sales for the holiday season rose 4.3% compared to 2012's holiday season, the retailer still plans to reorganize in order to cut costs in 2014.
Macy's says $100 million will be saved by closing the five stores and cutting 2,500 jobs. These changes also have the store forecasting a higher profit than the original analysts forecast.
The company will also be relocating some of their stores, as well as combining their Midwest region with their North region. This will cut their regions from eight to seven.
In a statement, Macy's Chief Executive Officer Terry Lundgren said, "We have identified some specific areas where we can improve our efficiency without compromising our effectiveness in serving the evolving needs of our customers."
Lundgren has been able to do what many other retail stores have not - keep profits growing in a time when consumers aren't spending as much as they once did. He has even added merchandise from celebrity designers the likes of Madonna. Lundgren also allows lower-level managers to tailor products that are more likely to sell in their stores.
After the announcement was made, shares rose 6.7% to $55.30 in extended trading in New York.
Macy's announced Wednesday they will lay off approximately 2,500 workers as the retailer restructures its business. http://t.co/wnpkCp8UZB
— KARE 11 (@kare11) January 9, 2014
Macys and BBVA Compass cutting thousands of jobs. Guess QE didn't help them :(.
— NateA (@NateA11) January 9, 2014
These reorganization plans don't make that much sense to one person on Twitter.
— OpSafeWinterBUFFALO (@OpSafeWinterBUF) January 9, 2014