Macy's to shut 5 underperforming stores
NEW YORK, Jan 5 (Reuters) - Macy's Inc (M.N) said on Tuesday it was closing five of its namesake department stores, affecting about 307 employees, as it pares underperforming locations.
Macy's said it would offer jobs at nearby stores to displaced employees when possible.
The five stores Macy's is closing are in Boise, Idaho; Waterford, Michigan; St. Ann, Missouri; Missoula, Montana, and Burlington, New Jersey. Those locations "no longer meet our performance requirements," Chief Executive Terry Lundgren said in a statement.
Clearance sales at the closed stores are set to begin on Sunday and last about 60 days, the company said.
The company also said it plans to open two Bloomingdale's stores in 2010, one in Santa Monica, California, and the other in Dubai, which will be the first foreign location for the upscale department store.
The Dubai store, which will be located at The Dubai Mall, is scheduled to open in February, a Macy's spokesman said.
In the three months ended in October 2009, the retailer opened or re-opened six stores. Following the closings announced on Tuesday, it will operate 809 Macy's stores and 40 Bloomingdale's locations.
Macy's has struggled with shrinking sales during the economic slowdown. In November it forecast that sales at its stores open for at least a year, or same-store sales, would fall between 5.4 percent and 5.7 percent during its current fiscal year.
Macy's is expected to announced December's same-store sales results on Thursday.
Shares fell 23 cents, or 1.4 percent, to $16.84 on the New York Stock Exchange.
(Reporting by Phil Wahba; Editing by Steve Orlofsky, Bernard Orr)
Showing posts with label Terry Lundgren. Show all posts
Showing posts with label Terry Lundgren. Show all posts
Tuesday, January 5, 2010
Macy's To Shut Down 5 Underperforming Stores
From Reuters.com:
Tuesday, February 3, 2009
Macy's Cuts 7000 Jobs, Slashes Dividend In Reorganization Effort
Amidst bleak guidance reports, Macy's Inc. announced on Monday that it will cut 7,000 jobs or 4% of its workforce, as one of several steps to reorganize and cut costs.
Other actions to reduce expenses include eliminating merit salary increases across the company, a reduction of its match to employee 401(k) plan contributions in 2009, and cutting its capital expenditure budget to $450M from an original budget of $1 billion, saving $100M to $150M.
In a separate announcement, Macy's said it will repurchase outstanding $950M in debt that will mature later in 2009.
Broad reorganization efforts include a nationwide expansion of their "My Macy's" initiative, an experimental "customer-centric" program. Launched in 20 selected geographic markets in spring of 2008, "My Macy's" is used to identify and serve consumer needs location by location. The program will expand to 49 more districts in the second quarter.
Macy's expects these moves to save them $250M in 2009 and $400M per year beginning in 2010.
Meanwhile, the outlook for Macy's continues to be bleak. The company predicts that same-store sales in 2009 will be down 6-8%. Earnings per share forecasts is in the range of $0.40 - 0.55 per share. On Monday, Moody's Investors Service said that it may cut its rating on Macy's into junk terrority, which would increase borrowing costs for the company.
"Reducing our workforce is an unfortunate outcome of the current economic environment, and I am frustrated that so many of our people will be unable to move forward with us as we proceed into a very exciting future for Macy's and Bloomingdale's," Terry Lundgren, Macy's Chief Executive said.The company also announced that it will slash it's quarterly dividend 62% from 13.25 cents per share to 5 cents per share. This cut in dividend is expected to save the company $138M in cash for fiscal 2009.
Other actions to reduce expenses include eliminating merit salary increases across the company, a reduction of its match to employee 401(k) plan contributions in 2009, and cutting its capital expenditure budget to $450M from an original budget of $1 billion, saving $100M to $150M.
In a separate announcement, Macy's said it will repurchase outstanding $950M in debt that will mature later in 2009.
Broad reorganization efforts include a nationwide expansion of their "My Macy's" initiative, an experimental "customer-centric" program. Launched in 20 selected geographic markets in spring of 2008, "My Macy's" is used to identify and serve consumer needs location by location. The program will expand to 49 more districts in the second quarter.
"We have been very encouraged by early results from our My Macy's district structure in capturing new sales opportunities in pilot markets over the past year," Lundgren said. "In fact, of the company's top 15 best-performing geographic markets in December, 13 were My Macy's pilot districts. We are moving quickly and decisively to expand this model to all of our markets so we can pursue sales-driving opportunities as we position ourselves to capture share in every local market.Further reorganization will entail the elimination of Macy's geographic division structure in favor of a more "unified organization", centralizing the company's buying, merchandise planning, stores senior management and marketing functions in New York, while corporate business functions will be located in Cincinnati.
Macy's expects these moves to save them $250M in 2009 and $400M per year beginning in 2010.
Meanwhile, the outlook for Macy's continues to be bleak. The company predicts that same-store sales in 2009 will be down 6-8%. Earnings per share forecasts is in the range of $0.40 - 0.55 per share. On Monday, Moody's Investors Service said that it may cut its rating on Macy's into junk terrority, which would increase borrowing costs for the company.
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