NEW YORK—Struggling with sagging sales over another crucial holiday shopping season, Macy’s announced on Wednesday that it was eliminating more than 10,000 jobs as part of a continuing plan to cut costs and close 100 stores.
Macy’s, the country’s largest department-store chain, said sales at its stores had fallen 2.1 percent in November and December, compared with the same period in 2015. Terry J. Lundgren, the company’s chairman and chief executive, said in a statement that, while the trend was “consistent with the lower end of our guidance, we had anticipated sales would be stronger.”
He attributed the decline to “broader challenges” facing much of the retail industry.
Consumers, who endured a long recession, have turned to low-cost chains like, T.J. Maxx, and shifted their spending away from brick-and-mortar stores for the convenience of online shopping with the retail giant Amazon.
The announcement on Wednesday continued a trend for Macy’s, which announced last January that it was eliminating about 4,500 jobs in a major restructuring. Then, too, it said slumping holiday season sales had hurt its bottom line.
The company, which now has 730 stores, announced in August that it would close 100 of them. On Wednesday it identified 68 stores to be closed. The 158,000-square-foot store in the Douglaston neighborhood of Queens, which opened in 1981, will close. Stores at the Marketplace Mall in Rochester; at the Oakdale Mall in Johnson City, near Binghamton; and at the Preakness Shopping Center in Wayne, New Jersey, will close, the company said.
Of the 68, three were closed by the middle of 2016, 63 will close in the spring and two will be closed by the middle of 2017. Three other locations were sold or are to be sold. The company said it planned to close about 30 other stores over the next few years.
Some employees may be offered positions at nearby stores, but Macy’s estimated that 3,900 workers would be affected by the closings. It also said it planned to restructure parts of its business, leading to a reduction of an additional 6,200 jobs.
Overall, the job cuts represent about 7 percent of its work force.
The company estimated that the changes would save about $550 million a year, starting in 2017.
Lundgren said the company was closing stores that were “unproductive or are no longer robust shopping destinations because of changes in the local retail shopping landscape.” Other sites were being targeted for closing to take advantage of their highly valued real estate. The company, which owns the Macy’s and Bloomingdale’s brands, has been struggling with declining traffic in its stores, where the bulk of its business is still conducted. It plans to invest some of its savings in expanding its digital business.
Macy’s said it now expected to earn $2.95 to $3.10 per share on an adjusted basis for fiscal 2016, compared with its prior forecast of $3.15 to $3.40 per share.
Shares in Macy’s fell nearly 10 percent to $32.30 in after-hours trading on Wednesday.
Image credits: Carlos Gonzalez/Star Tribune via AP