Macy’s Job Cuts: Chain Aims To Save $100 MillionBy: Ashley Olds - January 9, 2014
Despite its financial success over the holiday, Macy’s has announced plans for closings and layoffs for 2014.
By early spring, the company will be closing five stores in Arizona, Kansas, Missouri, New York, and Utah – opening eight new ones in their stead. This change marks the start of Macy’s imminent restructuring to reduce annual company costs. As they combine their Midwest and North regions, a new North Central region will be created, and seven zones will be left in lieu of eight.
As the final clearance sales in many areas are set to initiate as soon as Monday, patrons loyal to their hometown locations already agree that the local stores they frequent have prematurely been seeing a decrease in numbers.
“It’s just almost haunted now. Nobody is picking up spaces,” said one shopper of the Metcalf South location in Kansas.
Another added, “Even just taking out the trash and walking through, it’s really sad because everything is gone. There’s nothing here.”
As one would expect with a cost-reduction plan of this magnitude, also decreasing will be the number of jobs this year. Because the company’s intention is to cut lower central office, administration, and back-of-house expenditures, about 2,500 positions will be eliminated. As Macy’s modifies its business this year, some associates may be reassigned or transferred. However, not every position that opens up will get filled. These modifications are all part of the company’s goal to make $100 million in savings a year.
Macy's cutting 2,500 jobs, closing stores to reduce costs: http://t.co/ntNVxoVxnd
— Orlando Sentinel (@orlandosentinel) January 9, 2014
There’s no reason to doubt Macy’s aim for reaching this goal, either.
Terry Lundgren (Macy’s C.E.O.) has already been able to sustain profit growth by implementing merchandise that’s exclusive and competitively priced, increasing online sales via store inventory web orders, and giving lower-level managers some autonomy in altering assortments to fit the tastes of local consumers.
“They are running a good business and hats off,” said Stifel Financial Corp. analyst Richard Jaffe, via phone.” He went on to say, “The fact that they can take $100 million of costs out of the equation is a nice thing. You can increase earnings by reducing costs. I’ll take it.”
Things are already looking up for Macy’s – $2.66 up, that is.
During extended trading Wednesday, Macy’s rose 5.1%, to $54.50 following forecast reports for its cost-reduction plan.
Image via Youtube