Sadie Keljikian, Express Trade Capital
With overseas markets in turmoil on Wednesday Macy’s announced that approximately 4,500 jobs will be eliminated, roughly 3% of its total workforce, as part of a significant restructuring move. According to Macy’s, a surprisingly weak holiday season has hurt the business’s bottom line.
The struggle to keep sales up has been felt throughout brick and mortar retail businesses this winter, particularly at Macy’s, with sales falling 4.7% in November and December. With temperatures higher than they’ve been in years, consumers were not looking to buy outerwear as early in the season, or in as large quantities.
In addition to unseasonable weather, Macy’s faces fierce competition from heavy discount retailers like T. J. Maxx and “fast-fashion” brands such as H&M and Zara. Fast-fashion refers to brands which produce and sell garments at an accelerated rate, allowing for mid-season merchandise adjustments when necessary. The shift to predominantly online shopping has also hurt the business, with online giants like Amazon gaining increasing market share. A stronger dollar is taking some of the blame as well, as Macy’s claims that international tourists have curbed their spending as a result.
Cutbacks will be distributed among some 3,000 store employee positions, 650 back-office positions, and 165 senior executive jobs, as well as a call center in St. Louis, which will be closed.
Along with downsizing the workforce, Macy’s plans to eliminate 36 of its department stores in favor of new off-price locations known as Macy’s Backstage, introduced last year. The company also plans to open new Macy’s and Bloomingdale’s stores in Abu Dhabi in 2018.
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