- Irene Jiang / Business Insider
- Macy’s is closing over a hundred stores, cutting 2,000 corporate jobs, and shuttering offices as part of a three-year cost-savings plan.
- The company will be closing its San Francisco, downtown Cincinnati, and Lorain, Ohio, offices.
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Macy’s plans to close 125 stores over the next three years and cut thousands of corporate jobs, the company said on Tuesday.
The store closings represent about one-fifth of the retailer’s locations. The company will also cut 2,000 corporate jobs, or about 9% of its corporate head count, and close several offices. The changes are part of a three-year plan that Macy’s said would generate gross savings of $600 million in 2020 and $1.5 billion annually by 2022.
“We are taking the organization through significant structural change to lower costs, bring teams closer together, and reduce duplicative work,” Macy’s CEO Jeff Gennette said in a statement on Tuesday. “This will be a tough week for our team as we say goodbye to great colleagues and good friends. The changes we are making are deep and impact every area of the business, but they are necessary.”
Macy’s said New York City would become the company’s sole corporate headquarters.
The company will close its offices in San Francisco, downtown Cincinnati, and Lorain, Ohio. Macy’s will also close its Tempe, Arizona, customer contact center and consolidate customer-service work into its facilities in Mason, Ohio, and Clearwater, Florida.
“We will focus our resources on the healthy parts of our business, directly address the unhealthy parts of the business and explore new revenue streams,” Gennette said. “Over the past three years, we have shown we can grow the top-line; however, we have significant work to do to improve the bottom-line. We are confident the strategy we are announcing today will allow us to stabilize margin in 2020 and set the foundation for sustainable, profitable growth.”
Macy’s will upgrade remaining stores and grow its off-price chains
After closing 125 stores, Macy’s will have about 400 stores remaining. About 100 of those stores will get what Macy’s calls “growth treatment” in 2020, which includes improvements to the physical store and investments in merchandising strategies, technology, talent, and local marketing. The company has applied these upgrades to 150 stores so far and said they outperformed other locations.
Macy’s is also planning to expand its off-price chains, including Backstage and Bloomingdale’s The Outlet, the company said on Tuesday. Macy’s will open an additional 50 Backstage store-within-store locations and seven freestanding Backstage stores away from shopping malls.
Macy’s also said it was testing a small store format called Market by Macy’s. Like Backstage stores, these Market by Macy’s will be away from malls in what Macy’s called “lifestyle centers.”
The stores will carry a small selection of Macy’s merchandise and local goods, as well as food and beverage options and a “robust community events calendar,” the company said. The first Market by Macy’s store will open in Dallas on February 6.
The Wall Street Journal first reported news of the closures and job cuts on Tuesday.
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