Macy's Announces 5,000 Job Cuts, Closure Of 7 More Stores; Stock Tumbles

The Amazon juggernaut continues to crush brick and mortar retailers.

On Thursday morning, former retail giant Macy's, announced that was preparing to fire 5,000 job cuts, including closure of seven previously unidentified stores and other cuts at remaining locations, as it seeks stability in a tumultuous climate for "physical retail." The retailer's cost reductions come as it announced that its comparable holiday sales rose a modest 1.1% for the Nov/Dec period relative to 2016.

Although the company described its holiday sales as "solid," the performance trailed fellow department-store chain J.C. Penney, which posted a 3.4% increase Thursday. Macy's also narrowed its FY 2018 (ending Jan. 2018) year comp. sales view to a decline of 2.4%-2.7% on owned basis, down 2%-2.3% on owned plus licensed basis and total sales down 3.6%-3.9%. This was in line with the latest forecast given in November, which called for sales down 2.2%-3.3% on owned basis, down 2%-3% on owned plus licensed basis and total sales down 3.2%-4.3%.

And while Macy's continues to struggle with margin compression and inventory (mis)management, clearly the far bigger problem is the secular decline for the company (thank you Amazon) with Macy's today announcing it was closing 11 stores in FY19 (year ending Jan. 2019), vs the 4 announced previously, part and parcel with the 5,000 laoffs, as well as the company's intentions to "further streamline some non-store functions."

 

Macy's disclosed the following seven locations for shuttering which it had previously not identified for closure:

  • Miami (Downtown), Miami
  • The Oaks, Gainesville, Fla.
  • Novato (Furniture), Novato, Calif.
  • Honey Creek Mall, Terre Haute, Ind.
  • Birchwood Mall, Fort Gratiot Township, Mich.
  • Fountain Place, Cincinnati
  • Burlington Town Center, Burlington, Vt.

The retailer also said Thursday it is moving ahead with four other store closures previously announced:

  • Laguna Hills Mall, Laguna Hills, Calif.
  • Westside Pavilion, Los Angeles
  • Stonestown Galleria, San Francisco
  • Magic Valley Mall, Twin Falls, Idaho

Putting the closures in context, they are are part of a plan announced in August 2016 to shutter 100 stores. Altogether, the company has now revealed 81 of the 100 locations.  Macy's sees closing an additional 19 stores as leases or operating covenants expire or sale transactions are completed. Including the stores announced today, M has closed 124 stores since 2015.

Macy's ongoing woes are good news for bargain hunters: the company said that liquidation sales are likely to begin Jan. 8 and continue for eight to 12 weeks.

"Looking ahead to 2018, we are focused on continuous improvement and will take the necessary steps to move faster, execute more effectively and allocate resources to invest in growth," Macy's CEO Jeff Gennette said in a statement.

Macy's has been struggling with its massive real estate footprint and traditional retail model, as Amazon.com soars and physical competitors such as treasure-hunt retailers T.J. Maxx and Marshall's offer (better and cheaper) alternatives. Despite the challenges, Macy's reported strong performances for active apparel, beauty products, shoes, dresses, coats, fine jewelry and some other items.

Ironically, the company also said its digital sales jumped by double digits. The problem is that when compared with Amazon's own same store sales - all digital of course - it is too little, too late.

* * *

But what is most troubling for Macy's, is the stock's reaction to today's news: whereas in the past, M would jump on any mass layoff and/or closure news, this time it enjoyed a brief kneejerk moment in the green, before tumbling.

asd

Comments

Endgame Napoleon gatorengineer Thu, 01/04/2018 - 16:07 Permalink

Amnestied illegal aliens should not have to use their increased refundable child tax credit of $1,400 per child, nor their $6,444 maximum EITC tax handout for workers with 3 or more kids, to pay higher delivery fees on Amazon goods, no more than they should have to pay for rent or groceries. When they have sex and reproduce for the motherland, all of their major household expenses need to eliminated — and are — by US taxpayers so that they can work more cheaply than all of the Americans whose tax cuts mean $24 per paycheck that will not help one bit with rent than takes half of earned-only income. But hey, the employers of welfare-supported immigrants got a huge tax cut, Macy’s execs included. 

https://www.irs.gov/credits-deductions/individuals/earned-income-tax-cr…

https://www.google.com/search?ei=iZVOWtmMB8STmQHG7YaICw&sjs=3&q=Illegal…

https://www.google.com/search?q=daily%20caller%20illegal.alien%20child%…

In reply to by gatorengineer

danl62 gatorengineer Thu, 01/04/2018 - 18:26 Permalink

https://aionhill.com/ecommerce-vs-brick-and-mortar-2016-holidays

Declines Hit the Department Store

 

The department store market is worth approximately $165 billion in annual sales, but revenue has continued to fall at an annualized rate of 3.5% since 2011. More than 51% of those sales come from apparel, a market segment that’s both declining and heading online.

But, when looking at this holiday season itself, department store sales were down nearly 4.8%.

Consumers heading to the mall are shifting their attitudes and seeking out a way to easily and quickly make their purchase. The one caveat, per Deutsche Bank, is when an apparel retailer is offering a deep discount, but that means always competing on sale prices in a segment that already had thin margins.

 

Store closures: Overall, Americans are also spending less on apparel and accessories, and this decline will have significant impacts in 2017. Morningstar Consumer Equity Strategist RJ Hottovy recently said that the market should expect consolidation and shifting competition as larger brands close stores en masse, with some retailers expected to file for bankruptcy.

 

Most major department stores have been slowly closing stores for a few years, with e-commerce competition getting much of the blame, and 2017 appears to have an accelerated path to turning out the lights.

 

You were saying?? Notice that I said there is more than one reason for the decline.

In reply to by gatorengineer

JBLight GlassHouse101 Thu, 01/04/2018 - 14:04 Permalink

America is indeed broke but I also think people have grown tired of consuming so much. I can't speak for the masses but I have no interest in staying trendy with clothes and electronics. I'll wear my sneakers down to the last thread before getting another pair, and frankly I think that's normal. Online shopping keeps me from having to enter a mall or big box store and I'm very happy about that!

In reply to by GlassHouse101

Endgame Napoleon JBLight Thu, 01/04/2018 - 16:21 Permalink

It is good to be less mindlessly materialistic, but I think most people would spend money on priority items if they had extra money. Except the part-time-worker parents at tax time, they don’t have any extra money.

Big-box stores are a chore, must less pleasant than internet browsing, and one reason for that is the lack of customer service. But, if you have ever owned a small shop, you know that it is just a few cherished customers who really appreciate good service.

You may be right that the trend toward the strerile big-box store morphed into a distaste for the whole process of shopping.

It might also just be a lack of money, especially among full-time employees, with a full of household bills to cover on earned-only income and no pay-per-birth free cash from taxpayers.

Parents also have much more time to shop, as they can take as much time off from work as they want without ever being fired in the many crony-mom-gang jobs. 

In reply to by JBLight

Endgame Napoleon GunnerySgtHartman Thu, 01/04/2018 - 16:26 Permalink

Do people make a living on there, though? I think that is mostly hobbyists, earning a little extra money on the side to supplement other income. Sure, you lack the overhead, but since I went from being able to pay all my bills and a business loan in a brick-and-mortar shop to a home-based business that did not have anything like the volume needed to actually support a household, I deeply question whether the vast majority are making a living. A few people might be. When someone I know set up a store, she told me I was her first sale in many months. 

In reply to by GunnerySgtHartman

Newbie lurker Handful of Dust Thu, 01/04/2018 - 13:18 Permalink

Because Trump would have kept Macy’s in business? I’m confused. 

A rapidly changing marketplace with brick and mortar dinosaurs going extinct has fuck all to with Barack Hussein. It’s Amazon et al....plain and fucking simple  

 Not to mention the younger generation who now have money to spend don’t give a rat shit about what name brand is on their jeans or T-shirt. Only inner city basketball Americans care about that and they are just buying knock off Ecko shirts and Timberlands from Bubbles

I cant stand any of them but to blame this on the prior president is just grabbing the low hanging fruit. 

In reply to by Handful of Dust

Newbie lurker gatorengineer Thu, 01/04/2018 - 13:23 Permalink

Et al. 

 

online retailers....

 

and Have you ever been into a Macy’s? They have multiple floors. Only part is clothing, the rest is housewares. So yeah. Lots of overlap

 

Its like blaming Nixon or whoever the fuck on the Sears Roebuck mail order goin extinct. It’s a changing business model more than economy. If it was all economy, Amazon would be languishing also. It’s not if people are spending their money, it is where.  

In reply to by gatorengineer

JustPastPeacefield ThuleNord Thu, 01/04/2018 - 15:05 Permalink

At the mall I went to when I was younger - which was 98% White back then - there was a shooting last year, and a massive brawl at the food court last week. If Obama had a son ...

It's a Third World experience now. I didn't vote for it, but we let it happen. 

Tell me now how we live in a freedom-loving democracy and China is a red menace? Say this much for China, in 50 years, they'll still be Chinese.

 

In reply to by ThuleNord

nmewn Thu, 01/04/2018 - 12:45 Permalink

Over priced shit sold by employees who don't qualify as Mickey D workers with a big ass red star as its logo.
I mean, what could possibly go wrong?!

Ms No Thu, 01/04/2018 - 12:46 Permalink

Somebody needs to arrest that Zionist monopolist before he own our entire retail sector and the whole country gets laid off while he hires lazy eyed Ecuadorians for slave wages.  This is Rockefeller bullshit (a federal reserve ownership family).  Next time the fuckers don't get to keep their loot and they get hung.

gatorengineer Ms No Thu, 01/04/2018 - 13:24 Permalink

Its far beyond Beztard, ask yourself why the unions havent once tried to organize Amazon warehouses.... they are in on it is the reason.  Ask yourself why the post office ships Amazon crap AT A LOSS, the taxpayer picks, up, they are in on it.  Ask yourself why Walmart, has never made a serious effort to compete with Amazon, because, you guessed it, they are in on it.

The picture is alot bigger than 90 percent of the people see.

In reply to by Ms No