Retail giant Macy's plans to let go of 3.5% of its workforce and shut down 5 of its store locations situated within malls.
Rewritten Article:
Macy's is givin' 'em the axe, as the retail giant has announced it'll be shedding 3.5% of its workforce. A spokesperson confirmed the news via email, also revealing the closure of five full-line stores.
"Time to shake things up a bit," the spokesperson said in a statement, as Macy's gears up for a new strategy to cater to the ever-shifting consumer landscape and marketplace. "We've made the tough call to slim down our team to create a leaner, more efficient company," the spokesperson added.
Rumors have been circulating for quite some time about activist investors interested in cashing in on Macy's property. Tony Spring, incoming CEO, is set to take the reins early next year. The cuts and closures are all part of the retail gig, and Macy's needs to appease shareholders, according to Neil Saunders, Managing Director at GlobalData.
However, Saunders warns, "This ain't a one-off move; no retailer can reduce itself to success. It's a matter of time."
Remember when outgoing boss Jeff Gennette declared a year ago that a few store closures signified the final stage of fleet reduction? Well, that notion covered only 170 locations since 2016. Some market experts are predicting even more shutdowns in the future.
Macy's is in a mad dash to open smaller, off-mall stores – and that potentially means more full-line store closures. The company shared the decision regarding this year's five full-line closures is connected to finding the ideal mix between on- and off-mall stores – a project focused on achieving the perfect balance.
"This isn't the start of a trend, but more like a one-off recalibration," Saunders said. "Macy's, under the guidance of Tony Spring, desperately needs to concentrate on improving the shopping experience and beefing up sales," he added. "Although it's a rocky path, in the long run, it's far more sustainable than non-stop cost-cutting."
The Wall Street Journal first broke the story, citing an internal memo to employees indicating that about 2,350 corporate positions will be axed later this month. Automation, outsourcing, and faster decision-making are reportedly the reasons for the cuts.
Apart from the closure of anchors in Cali, Florida, Hawaii, and Virginia, Macy's plans to sell and relocate two furniture stores, according to Journal's report.
Editor's note: This story has been updated with analyst comments.
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Tune in for Macy's "Bold New Chapter," a strategic revamp designed to keep up with the morphing retail realm. Here's the lowdown on this strategic masterplan:
- Store Shutdowns: Macy's is planning to close up to 66 stores nationwide by the end of 2026, aiming to optimize store footprint and concentrate resources in profitable locations.
- Small Wonders: Macy's eyes setting up 30 smaller-format stores, aiming to be more efficient and cater better to changing consumer preferences.
- Budding Buds: Along with smaller Macy's stores, the company is expanding its Bloomingdale's and Bluemercury stores, focusing on luxury and beauty segments, respectively.
- Digital Dominance: Macy's doubles down on its e-commerce game, boosting its digital presence and establishing seamless integration with physical stores.
- Tomorrow's Styles: Through initiatives like the Future of Style Fund, Macy's supports emerging designers, partnering with institutions like the Fashion Institute of Technology (FIT) and the Fashion Scholarship Fund (FSF).
Job Impacts- Employee Redeye: While store closures will affect employees, Macy's plans to relocate workers where possible. The shift from traditional department stores to smaller, specialized formats may require employees to adjust roles and locations.- New Leaves: The opening of smaller-format stores and expansion into specialized retail segments could potentially generate new job opportunities in those areas, partially offsetting the impact of store closures.
Operational & Customer Experience Changes- Customer Glue: The strategy emphasizes improved customer interaction through personalized, efficient shopping experiences.- Footprint Fortification: Macy's seeks to maintain a strong retail foothold by closing underperforming locations and opening new, more suitable stores in-line with customer preferences for convenience and online integration.
- Macy's is planning to automate, outsource, and make faster decisions as part of its workforce reduction of about 2,350 corporate positions.
- The retail giant is shedding 3.5% of its workforce and closing five full-line stores as part of its new strategy to cater to the changing consumer landscape and marketplace.
- The company is aiming to optimize its store footprint by closing up to 66 stores nationwide and opening 30 smaller-format stores by the end of 2026.
- Macy's is also expanding its Bloomingdale's and Bluemercury stores, focusing on luxury and beauty segments, respectively, as part of its strategic revamp.
- The company is doubling down on its e-commerce game, boosting its digital presence and establishing seamless integration with physical stores.
- The strategic masterplan, dubbed "Bold New Chapter," includes initiatives like the Future of Style Fund, which supports emerging designers and partners with institutions like the Fashion Institute of Technology (FIT) and the Fashion Scholarship Fund (FSF).
