Macy's says it is closing 125 of its least productive stores and cutting 2,000 corporate jobs as the struggling department store tries to reinvent itself in the age of online shopping.
The store closures represent about one fifth of Macy's current total. The stores, which include about 30 that are in the process of closing, account for $1.4 billion in annual sales. The retailer also said Tuesday that it will be eliminating 9% of its corporate and support positions, according to USA Today.
Macy's didn't specify how many jobs would be lost at the shuttered stores. Among the stores that remain open, there will be job cuts "in some stores and increases in others,'' Macy's said in a statement.
The corporate jobs will be shed as Macy's closes its offices in Cincinnati and San Francisco, leaving New York as its sole corporate headquarters.
Macy's is also testing a new store format that's located at a strip center, instead of a mall, dubbed its “Growth 50” locations. These options are intended to attract shoppers with interest in picking up their online purchases at a convenient local store.
The moves announced Tuesday come ahead of Macy's annual investor meeting where CEO Jeff Gennette is expected to unveil a three-year reinvention plan.
In addition to closing stores, Macy’s announced in a statement it would it is shutting its San Francisco offices that handled tech functions, moving those tasks to New York City and Atlanta.
Clearance sales will likely begin soon for those stores affected by closures, a Macy’s spokeswoman told USA Today Network’s TCPalm.com.
Many of the stores closing were plagued by continual declining sales at “lower tier” malls.
"The further closure of stores at Macy’s is a sign that the company is still failing to provide consumers with the right product at the right price,'' Neil Saunders, managing director of the retail consultancy Global Data said in an investors note. "It’s weak understanding of what shoppers want, and it’s failure to adapt to changes in the market, means Macy’s has lost relevance.''
Still, he added, "it is good to see Macy’s cutting out dead wood before it affects the rest of the business."
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