|Macy’s, Inc. Outlines Cost Reduction Initiatives to Support Continued Profitable Sales Growth|
Annual cost savings of approximately
(Editor’s Note: Macy’s, Inc. this afternoon also issued a separate news release announcing sales results for the 2013 holiday season and initial sales and earnings guidance for FY2014.)
“Our company has significantly increased sales and profitability over
the past four years, and we have created a culture of growth at Macy’s,
Inc. We began five years ago with a set of business strategies that were
largely untested by a national retailer of our size and scope. As the
success of these strategies has unfolded, we have identified some
specific areas where we can improve our efficiency without compromising
our effectiveness in serving the evolving needs of our customers,” said
“The actions being announced today reinforce our focus on continuous improvement in our M.O.M. strategies (My Macy’s localization, Omnichannel integration and Magic Selling customer engagement) and will help us to maximize the impact of the exceptional talent we enjoy at every level of our organization,” Lundgren said.
Changes being announced today are estimated to generate savings of
In conjunction with the implementation of these cost reductions, as well
as of store closings and asset impairment charges, an estimated
Operating Cost Reductions
Cost reductions and organizational changes reflect learnings from the implementation of business strategies and new technologies at Macy’s in recent years. Changes include:
Approximately 2,500 employees are expected to be laid off and are eligible for severance as a result of these organizational changes. Other associates are being reassigned with new duties or transferred; some open positions will not be filled. Meanwhile, the company continues to add positions in other parts of the company – such as in online operations, direct-to-consumer fulfillment and new stores. In total, the Macy’s, Inc. workforce is expected to remain at a level of approximately 175,000 associates.
Macy’s, Inc. today also detailed a series of normal-course adjustments to its portfolio of Macy’s and Bloomingdale’s stores across the country.
“Our stores remain a very important component of our omnichannel strategy for both the Macy’s and Bloomingdale’s brands. We continue to maintain a very strong nationwide network of stores through an ongoing process of selectively adding new locations while also trimming those that no longer meet our performance requirements or where our leases were not renewed,” Lundgren said.
The company is announcing today that it will close the following five
Macy’s stores in early spring 2014. Final clearance sales will begin on
The company is committed to treating associates affected by store closings with respect and openness. Associates displaced by store closings may be offered positions in nearby stores where possible. Eligible full-time and part-time associates who are laid off due to the store closing will be offered severance benefits.
Eight new and replacement Macy’s and Bloomingdale’s stores are currently planned and/or under construction, as previously announced.
Once all of these changes have been implemented, Macy’s, Inc. will
operate 844 stores in 45 states, the
Macy’s, Inc., with corporate offices in
All statements in this press release that are not statements of
historical fact are forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Such statements are
based upon the current beliefs and expectations of Macy’s management and
are subject to significant risks and uncertainties. Actual results could
differ materially from those expressed in or implied by the
forward-looking statements contained in this release because of a
variety of factors, including conditions to, or changes in the timing
of, proposed transactions, prevailing interest rates and non-recurring
charges, competitive pressures from specialty stores, general
merchandise stores, off-price and discount stores, manufacturers’
outlets, the Internet, mail-order catalogs and television shopping and
general consumer spending levels, including the impact of the
availability and level of consumer debt, the effect of weather and other
factors identified in documents filed by the company with the
(Note: additional information on Macy’s, Inc., including past news releases, is available at www.macysinc.com/pressroom)
Source: Macy’s, Inc.