Macy's Workers Threaten To Strike [UPDATE 3 6/17]

UPDATE III 6/17:

Women's Wear Daily reports details of the contract agreement:

Under the terms of the contract, all union workers will receive a general raise of $3.05 an hour over the next five years, full-time employees who work between 35 and 40 hours a week are guaranteed to hold onto those hours, workers will get one guaranteed day off a month expect during the holiday season and they can select the day. Extra hours can be picked up by part-timers, who will be eligible to participate in the medical plan if they reach full-time hours, no vacation benefits will be reduced and Macy’s will contibute more to cover the cost of health care while the workers will pay less.

According to a union officials, the new contract “delivers real gains and protections for the Macy’s workforce in the New York City area.”

UPDATE II 6/16 @10:20am:

NYC Macy's workers reach tentative agreement

The retailer and the union representing workers at several of its New York City area locations reached a tentative contract agreement Thursday morning.

(AP) - Macy's and the union representing workers at its flagship Manhattan store and three other New York locations reached a tentative contract agreement Thursday following all-night negotiations.

The union and Macy's made the announcement on the five-year proposed pact in separate statements.

Local 1-S of the Retail, Wholesale and Department Store Union said workers at the Herald Square flagship store would begin voting on the proposed contract on Thursday. Workers at the other stores, in the Bronx, Queens and Westchester County, would vote next Monday through Wednesday, it said.

"This is a solid contract and it reflects the fact that our workers are the true magic of Macy's," said RWDSU President Stuart Appelbaum. (MORE...)

UPDATE 6/16 @7:30am: Reuters reports negotiations continue past the midnight deadline into the morning.

If you live in Manhattan, the Bronx, Queens or White Plains, NY, and you need to get a few items at Macy's, you better hurry!
After five weeks of intense negotiations between Macy's management and the Local 1-S of the Retail, Wholesale and Department Store Union, 4000 workers have voted to strike if they can't come up with a new contract by 11:59pm Wednesday. Among the issues are benefits, wages and work hours:

Under the contract proposed by Macy’s, new employees would receive a 401(k) package rather than a defined-benefit pension plan; hours would be set by a new computerized system, which would dole out work assignments on a first-come-first-served basis, rather than recognize seniority or student or family schedules; and workers would pay more for health care.

Management has proposed a 35-cent hourly wage increase for current workers, and no change to the starting hourly wage of $7.50, which union negotiators have said does not constitute a living wage in New York.

However, with Macy's posting comp. sales up 7.4% in May, first quarter sales for FY 2011 up 5.7% to $5.89M and net income for the quarter increased to $131M from $23M, union officials feel management can afford to share the wealth.

“This is a company that’s in great shape financially, so it’s unacceptable for Macy’s to try to extract such massive concessions when many members of its workforce are struggling,” said Stuart Appelbaum, president of the RWDSU. “This is a textbook case of corporate greed and excess. Macy’s is in a position to give its workers a much better contract. It must stop trying to take away everything its dedicated workers have fought so hard and so long to get.”

Madonna For Macy's?

In today's "You're About Two Decades Late" headlines, WWD is reporting that Madonna is in talks with Iconix Brand Group to launch a contemporary women's line that will be sold exclusively at Macy's department stores:

The merchandise would include apparel, accessories, intimates and footwear. Label names under serious consideration for the product lines include Material Girl for the apparel and Truth or Dare for the lingerie and underwear.

I know I should reserve judgement until I see the clothes, but I must admit that my initial reaction is: Do people want to dress like Madonna? Her M by Madonna line for H&M had several cute pieces that would fit the Macy's aesthetic, but it wasn't as well received as people expected.  Which brings us to the subject of the success rate of celebrity lines:

Speaking to American Public Media, Marshall Cohen, NPD's senior analyst, estimated that the misses in celebrity lines outnumber hits by a two-to-one margin. Jessica Simpson had a successful footwear collection but has struggled with sportswear. Jennifer Lopez pulled the plug on her Sweetface last year amid the recession. Other fashion failures included efforts from Eve, Paris and Nicky Hilton and Whitney Port. (SOURCE: Retail Wire)

Madonna must bring something new and fresh, and naming your line Material Girl or Truth or Dare won't cut it.

Macy's To Shut Down 5 Underperforming Stores

From Reuters.com:

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)

US Retail Sales Rise In September, Raise Holiday Hopes

US retail sales rise in Sept, raise holiday hopes

By Jessica Wohl

CHICAGO, Oct 8 (Reuters) - U.S. retailers gave investors an early Christmas present, posting their first monthly sales increase in more than a year and suggesting wounded consumers might begin to heal in time for the crucial holiday season.

Chains such as Macy's Inc (M.N), Abercrombie & Fitch (ANF.N) and Kohl's Corp (KSS.N) surprised Wall Street on Thursday with better-than-expected September sales as shoppers headed back to stores for back-to-school purchases.

"It signals a bottom," said Wharton School marketing professor Stephen Hoch. "This month was not just not as bad as we thought it could be, but it was actually not so bad."

But retail experts cautioned that the sales results did not yet presage a consumer-driven recovery to the U.S. economy. The International Council of Shopping Centers said October same-store sales should be about flat with a year earlier.

"It might be too early to say consumers are actually coming back to the stores and spending more," said Booz & Co Principal Marcelo Tau. "I still feel that there is a lot of pressure on consumers."

Based on 30 retailers, sales at stores open at least a year climbed 0.6 percent, compared with expectations for a 1.1 percent decline, according to Thomson Reuters data. Nearly 80 percent of the companies beat expectations.

READ FULL ARTICLE HERE.

Macy's Inks Exclusive Deal With Ellen Tracy

After much industry speculation, Macy's, Inc. has announced they have entered into a strategic alliance with Ellen Tracy owner, Brand Matter LLC, and and its sportswear licensee, RVC Enterprises that will make Macy's the exclusive department store retailer of Ellen Tracy women's sportswear, beginning in spring 2010.

The exclusive Ellen Tracy better sportswear line will have a modern twist, focusing on separates that consist of jackets, shirts, pants, sweaters, woven tops, knit tops and bottoms. Price points will range from $99 to $149 for jackets and $50 to $99 for pants.

"Ellen Tracy is a legendary brand that is well-known to our customers and backed by an outstanding design team. In particular, Ellen Tracy delivers exceptional value to women who expect quality and want a relevant look for today's world at work and on the town," said Jeff Gennette, Macy's chief merchandising officer.

Mark Mendelson, president and CEO of the Ellen Tracy division of RVC, said, "My team and I are thrilled to bring the Ellen Tracy heritage and style to a more accessible pricepoint. We look forward to entering, building and eventually becoming one of the leading brands in the better department".

"We are excited to form this long term tri-partnership with RVC and Macy's. Macy's is the preeminent national department store in the United States and we believe that the Ellen Tracy brand will add significant accretive sales to the better sportswear floor", says Bill Sweedler, co-chairman and CEO of Brand Matter.

Initial launch of the exclusive sportswear line will begin in 100 Macy's stores and online at macys.com in March 2010, with plans for additional stores in the future. Macy's flagship stores in Herald Square in NYC, Union Square in San Francisco, State Street in Chicago and Dadeland in Miami are among those who will carry the Ellen Tracy shops in the initial launch.

This is a major coup for Macy's that could put them ahead of their competitors. When Ellen Tracy decided to move from bridge to better sportswear, a huge gap was left for retailers, since, for years, the brand served as an anchor for the bridge floors of department stores like Nordstrom, Lord & Taylor, Saks, Bloomingdale's and Dillard's. These department stores have been scrambling for a replacement ever since. Now, that Macy's will be carrying the brand exclusively, retailers are doubly concerned.

Ellen Tracy will be among a group of exclusive brands in partnership with Macy's, including Tommy Hilfiger, Martha Stewart Collection, Rachel Rachel Roy and Donald Trump.

 (SOURCE: Macy's Press Release)

Is Macy's Headed Towards Bankruptcy?

Is Macy's headed towards bankruptcy? The folks at Audit Integrity think so.

In a recent report, the independent financial research and risk modeling firm listed 20 large-cap companies ($1B or more in market capitalization) "that have the highest probability of declaring bankruptcy among publicly traded firms" in the next 12 months, with Macy's making the list. The Business Insider went a step further, whittling the list to the 10 worst of the worst using the following formula:

"Which companies appear the worst off? We took the list and removed any company with a market cap under $3 billion. We then ranked the remaining names by a simple measure of the market's perceived bankruptcy risk - Market Cap (MC) divided by Enterprise Value (EV). The less MC vs. EV, the less residual shareholders' value (above what debt holders can claim) the market is pricing-in for the company. Thus a lower MC/EV means the market thinks the company is more likely to go bankrupt."

Macy's comes in at #4:

4. Macy's

Does anyone even shop at department stores anymore?

Same store sales will likely keep falling at Macy’s right through 2009. With $2.4 billion of maturing debt over the next five years, the company is trying to cut costs, and has already reduced its dividend.

Hopefully the US consumer will bounce back soon, and actually want to shop at Macy's.

MC/EV=47%

I'm not ready to write off Macy's just yet. Their My Macy's initiative has made significant gains , with same-store sales of the program's 20 test market regions outperforming the rest of the company. These gains prompted Citigroup analyst, Deborah Weinswig to upgrade the stock to "Buy" from "Hold" on Tuesday, and double the price target to $30 from $15.

"We are encouraged by the consistent, positive early results that Macy's has reported from its 20 pilot My Macy's markets since spring 2008," the analyst wrote in her note to clients. "My Macy's initiative will be a key driver of same-store sales upside for the company ahead."

The program allows the company to reduce discounts. It also shows signs of improving relationships with vendors, leading to the development of more exclusive lines and unique sizes, Weinswig says. (SOURCE: Martketwatch.com)

Neiman Marcus’ Q4 Loss Deepens

Neiman Marcus’ Q4 loss deepens

Atlanta Business Chronicle
Wednesday, September 9, 2009, 10:59am EDT

Upscale retailer Neiman Marcus on Tuesday reported a fourth-quarter net loss that has deepened over the 2008 fiscal year.

Dallas-based Neiman’s posted a fourth-quarter loss of $168.5 million, which is deeper than the $35.6 million loss reported during the same period last year. During the same period, overall sales at Neiman’s hit $768 million, down from $1.03 billion. The quarter included the recording of a $143.1 million pretax impairment charge.

Meanwhile, Neiman’s same-store sales fell 23.4 percent in the fourth quarter.

For the fiscal year, the company reported a net operating loss of $668 million, down from a profit of $142. 8 million. Sales for the year fell from $4.6 billion in 2008 to $3.64 billion this year.

Chairman and CEO Burton Tansky added that the company “tightly managed its expenses,” eliminated $100 million in costs and ended the year with 23 percent less merchandise due to better inventory management.

"Fiscal year 2009 was a very challenging year fo rour company. We quickly began addressing the many challenges we faced due to a sharp decline in our business, precipitated by the downturn in the economy," Tansky said.

(SOURCE: Atlanta Business Chronicle)

Saks Posts Lost, Beats Wall St. Exprectations

Saks quarterly loss not as deep as expected
Tue Aug 18, 2009 9:23am EDT

CHICAGO, Aug 18 (Reuters) - Upscale department store operator Saks Inc (SKS.N) posted a narrower-than-expected quarterly loss on Tuesday as it trimmed costs while well-heeled shoppers held back from pricey purchases.

Saks' net loss widened to $54.5 million, or 39 cents per share, in the fiscal second quarter ended on Aug. 1, from $32.7 million, or 24 cents per share, a year earlier.

Excluding impairments and dispositions and a gain on the extinguishment of debt, Saks lost 40 cents per share, less than analysts' average forecast of a loss of 52 cents per share, according to Reuters Estimates.

Shares of Saks, which have more than tripled in value from their March lows, rose 7.7 percent to $5.76 in premarket trading.

The recession, an unsteady stock market since September and job losses have curbed consumers' ability to spend freely in Saks' stores. To offset languishing sales, Saks has been cutting costs and trimming inventory.

Sales fell 14.5 percent to $561.7 million, with same-store sales down 15.5 percent.

Saks, which sells designer brands such as Marc Jacobs, Versace and Oscar de la Renta, said the sales decline at its New York City flagship store continued to be steeper than at other existing locations.

The current climate makes it very difficult to predict sales and gross margin performance with any certainty, Chief Executive Stephen Sadove said in a statement.

Saks expects same-store sales to fall in a mid-to-high single digit range in the second half of the year, with the third quarter being weaker than the fourth.

It still expects same-store sales to fall in a low double digit range for the full year. Same-store sales fell 22.4 percent in the first half of the year.

Saks expects gross margins to rise in the second half of the year, partly because it is carrying less inventory.

The company is also cutting other costs. It aims to spend about $55 million on capital projects this year, after spending about $75 million last year.

(Reporting by Jessica Wohl, with additional reporting by Aarthi Sivaraman in Seattle, editing by Gerald E. McCormick)

(SOURCE: Reuters.com)

Macy's Profits Down, Outlook Up

Despite being bogged down with reorganization costs, Macy's, Inc. reported profits that were better-than-expected, and raised their outlook for fiscal year 2009.

The company's second quarter earnings were down to $7M, or $.02 per share, vs. $73M, or $.17 per share, from 2008. However, excluding restructing costs, earnings per share were $.20, still down from the previous year's E.P.S of $.29, but exceeding analysts' estimates of $.17 per share.

"We were able to exceed our expectations with strong earnings and cash flow in the second quarter, despite lower sales in an economic environment that continues to be very difficult," said Terry J. Lundgren, Macy's, Inc. chairman, president and chief executive officer. "In particular, we successfully lowered inventories and managed expenses to align more closely with current levels of business. Our second quarter same-store sales performed as well as or better than most department store retailers even while we were completing the largest organizational transition in Macy's recent history. Most of that transition work is behind us now.

The results from the company's "My Macy's" initiative continue to show promise:

"We continue to be very pleased with results from the My Macy's initiative, which began to roll out to 49 new districts nationwide in the second quarter. Same-store sales performance in the 20 pilot districts launched in 2008 continued to outpace the remainder of the company, and the gap continued to widen in the second quarter. Going forward, we expect the gap to become less meaningful as the 49 new districts launched in 2009 come up to speed and begin producing results that parallel the pilot districts. As previously stated, we expect to see some improvement in these new districts in the fourth quarter of 2009 and especially in spring 2010," Lundgren said.

The first half saw a loss of $.19 per share vs. earnings of $.03 per share in 2008. Minus restructuring costs, EPS was $.04 per share vs. $.28 in the first half of '08.

Sales for the 2nd quarter were down 9.7% to $5.164B from $5.718 in '08. Macy's same-store sales for the quarter dropped 9.5%. Online sales helped the company's 2nd quarter and first half '09 comp sales by 0.5%. Online sales, which count towards same-store sales, rose 9.4% in the 2nd quarter and 12.7% in the first half of fiscal 2009.

The company raise it's guidance on fiscal year 2009 earnings, projecting EPS will be $.70 to $.80 per share, excluding restructuring costs.

Macy's shares closed at $16.40, up 6%.

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.

"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.

U.S. Prestige Beauty Sales Decline 3.3%

A report released by marketing research firm, NPD Group, Inc. shows that U.S. sales of prestige beauty products dropped 3.3% in 2008.

Among the global markets that were tracked by NPD, the U.S. prestige market -- which are products sold mainly in U.S. department stores -- showed the largest decline. France and Italy showed decreases of 0.3% and 0.5% respectively, while China boasted an increase of 17.2%.

U.S. makeup sales also showed a decline, but there was a bright spot in the skincare category. Overall growth in the category remained flat, however NPD says that there is opportunity for growth due to increase interest in anti-aging skincare products.

Karen Grant, NPD's senior global industry analyst and vice president of beauty, said that U.S. fragrance category showed the biggest decline in sales of all the categories that were tracked. “The most pressing concerns for the fragrance category are not only the loss of users, but decreasing frequency of usage," said Ms. Grant. "It is important that the industry find new ways to engage consumers, especially as they become more independent about their product selection".