Macy’s Realigns Regions, Cuts Jobs to Reduce Expenses

PrintCINCINNATI-Macy’s is planning to realign its regional store structure and eliminate certain jobs (including the district planner role for soft home) in an effort to cut its expenses.

In its regional end, the company is combining its Midwest region with its North region to create a new North Central region, thus reducing the number of regions from eight to seven. It will also combine nine store districts with nearby districts, reducing the number of districts from 69 to 60.

Regarding the elimination of the district planner post for soft home, Macy’s explained that home assortments, unlike apparel and accessories, change less often and tend to be similar across the country, which means they are less subject to localization. Along with removing that position, Macy’s will combine and reduce other posts in Macy’s stores, and trim certain central-office, administrative and back-of-the-house expenses, also involving staff reductions.

Overall, about 2.500 Macy’s employees are expected to be laid off. The company will continue to add positions in its online operations, direct-to-consumer fulfillment sector and in new stores. The moves are expected to save $100 million a year beginning this year, and Macy’s said it expects that its employee number will remain at about 175,000.

Macy’s also said it will close five stores in early spring, located in Arizona, Kansas, Missouri, New York State and Utah. It will also open eight new Macy’s and Bloomingdale’s stores this year. The new Macy’s will be in Florida, Nevada, New York State and Puerto Rico, while the new Bloomingdale’s will be in California, Hawaii and Florida.

Terry Lundgren, Macy’s chairman, president and CEO, said the cost cutting is intended to maintain the company’s sales and profitability growth, the result of its strategies begun five years ago. “As the success of these strategies has unfolded, we have identified some specific areas where we can improve our efficiency without compromising our effectiveness in serving the evolving needs of our customers,” Lundgren said.

In a separate statement, Macy’s said same-stores sales, including departments licensed to third parties, rose 4.3 percent during the 2013 holiday shopping season. Lundgren attributed the gain to “fresh and distinctive” merchandise at both Macy’s and Bloomingdale’s, as well as its “robust omnichannel shopping experience.”