Macy’s undergoing a restructuring
Macy’s has announced they will shut down 14 stores as part of a restructuring effort, citing a shift in how consumers shop. The retail giant notes that this is part of a broader plan to meet consumers where they are: online.
The closed stores will mean a reduction of 1,343 jobs and should be completed within the next few months. The news has the average layperson assuming the worst of the brand, but Macy’s is no JCPenney, no, this is a simple effort that is common for large brands. These closures represent only a fraction of the brand’s 790 stores across America.
Going back to online sales, Terry Lundgren, Macy’s CEO said in a statement, “Our business is rapidly evolving in response to changes in the way customers are shopping across stores, desktops, tablets and smartphones. We must continue to invest in our business to focus on where the customer is headed.”
What does the future hold for Macy’s?
Macy’s did not announce which locations would be shuttered, but note that combined, they generate roughly $130 million in sales annually, but under the restructuring plan, they’ll actually save $140 million in annual savings.
As further evidence that the restructuring is standard, they will not be halting their new store openings or real estate development plans. According to Forbes, Macy’s is creating a team to explore opportunities for a Macy’s off-price business, so watch for a potential entrance into the outlet biz.
Lundgren concluded that going forward, they’ll be able to “move more quickly and nimbly to select merchandise, assort inventories and serve total customer demand, no matter how, when or where the customer shops. Some redundant activity also can be avoided to accelerate speed to market, partner more effectively with vendor resources and ensure the merchandising organizations are more responsive to the marketplace in making and implementing decisions.”
