Macy's announces closure of 40 stores, staff cuts

After a difficult 2015, Macy's (NYSE:M) announced that it will close stores and implement other cost-reducing strategies beginning in early 2016. At the same time, the department store chain will invest in its omnichannel capabilities at Macy's and Bloomingdale's stores.

The announcement comes as no surprise, as Macy's Chairman and CEO Terry Lundgren announced he might close stores and take on tenants at flagship locations as the department store chain struggled to meet financial expectations ahead of the holiday season.

"In light of our disappointing 2015 sales and earnings performance, we are making adjustments to become more efficient and productive in our operations. 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 in our core Macy's and Bloomingdale's omnichannel businesses faster and with more intensity," said Lundgren. "In some cases, there will be short-term pain as we tighten our belt and realign our resources. But our eye is on a long-term vision of Macy's, Inc. as a dynamic retailer that serves existing customers and acquires new ones through innovative approaches to the marketplace."

To improve productivity, Macy's will begin consolidating flagship brand stores into five regions and 47 local districts, down from the current seven regions and 58 local districts.

The changes also include adjusting staffing levels at every Macy's and Bloomingdale's to improve efficiently. An average of three to four positions at 770 stores (with an average workforce of 150) will be affected, for a total of about 3,000 employees nationwide. About 50 percent of affected associates are expected to be placed in other positions.

The company will also implement voluntary separation opportunities for 165 senior executives who choose to leave by spring 2016 and 35 percent of these positions will not be replaced. 

An additional 600 positions in back-office organizations will be reduced, and about 750 workers in St. Louis will be out of a job when the St. Louis call center closes in the spring of 2016.

For more:
-See this Macy's press release

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