Macy's Cuts 2,300 Jobs, to Close Stores
● The cuts are being made primarily at the corporate office but five department stores and two furniture galleries will also close.
Macy's Inc. is laying off about 2,300 employees, accounting for 3.5 percent of the retailer's total workforce.
Macy's Inc., the parent of the Macy's, Bloomingdale's and Bluemercury brands, disclosed the cuts Thursday afternoon.
Within this round of employee reductions, most are occurring at the corporate office, though Macy's is also closing five of its department stores and two furniture galleries.
"The reduction impacted all functions across nameplates, with the majority being corporate Macy's Inc. jobs," a Macy's spokesperson said.
"As it related to stores, we continue to reposition our store portfolio and evaluate the right mix of on- and off-mall locations," the spokesperson said.
The five Macy's full-line locations being closed are in Arlington, Va.; San Leandro and Simi Valley in California; Lihue, Hawaii, and Tallahassee, Fla.
"As we prepare to deploy a new strategy to meet the needs of an ever-changing consumer and marketplace, we made the difficult decision to reduce our workforce by 3.5 percent to become a more streamlined company," Macy's said in a statement.
In the third quarter of 2023, after putting store closings on hold for awhile, the retailer did disclose the possibility of additional closings and said they would occur in January 2024. Typically, retailers determine store closures after the holiday season to capture as much business as possible in the peak selling period. Macy's previously disclosed a plan to close 125 department stores, of which 80 as of fall 2023 had closed since 2019.
News of the layoffs comes at a particular busy time for Macy's Inc. considering the business is in play and under some pressure, following December's $5.8 billion bid by Arkhouse and Brigade Capital Management, and because Macy's president Tony Spring will succeed Jeff Gennette next month as chief executive officer. Spring was formerly the CEO of the Bloomingdale's division.
The Arkhouse/Brigade bid is considered a low-ball offer, and it raises the possibility of better ones being received. Macy's has remained silent on the offer.
Macy's could be worth more since there's better earnings potential in 2024, following this year's improved inventory control, and the potential for new strategies, like the rollout of scaled-down, off-mall stores, simplified pricing, and private brand changes, starting to kick in next year when a soft landing of the U.S. economy is expected. The company is seeking to become less dependent on its traditional department store model and has been saddled with scores of locations losing relevance and starving for capital improvements.
For the third quarter of 2023, Macy's reported that net income dove by almost 55 percent to $108 million, or 39 cents a diluted share, from $239 million, or 76 cents a diluted share, in the year-ago quarter. This compares to diluted earnings per share of 1 cent in the third quarter of 2019.
Total sales in the three-month period ended Oct. 29 declined 3.9 percent to $5.23 billion from $5.44 billion a year-ago, but inched up 1.1 percent from the third quarter of 2019. Comparable third-quarter sales this year were down 2.7 percent on an owned-plus-licensed basis.