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Retailer slipped during challenging holiday season though it met goals of inventory reduction
Macy's Inc. (Cincinnati) has announced plans to close 11 stores after reporting a 4.7 percent sales decrease for the five weeks ended Jan. 3, 2009. Same-store sales were down 4 percent in December 2008 and down 7.5 percent for the combined November-December holiday period.
"These closings are part of our normal-course process to prune underperforming locations each year in order to maintain a healthy portfolio of stores," said chairman, president and ceo Terry Lundgren. "While new-store growth has slowed in the current economy, our long-term strategy is to continue to selectively add new stores while closing those that are underperforming."
The stores to be closed are located in: Ernst & Young Plaza in Los Angeles; The Citadel in Colorado Springs, Colo.; Westminster (Colo.) Mall; Palm Beach Mall in West Palm Beach, Fla.; Mauna Lani Bay Hotel in Hawaii; Lafayette Square, Indianapolis; Brookdale Center in Brooklyn Center, Minn.; Crestwood Mall in St. Louis; Natrona Heights (Pa.) Plaza; Century III Furniture and Clearance in West Mifflin, Pa.; and Bellevue Center in Nashville.
"The decision to close stores is difficult,” Lundgren said, “and often occurs when the market changes, new competing shopping centers are opened nearby to existing older ones or when customers change shopping habits. In the store closing process, we are committed to treating affected associates with respect and openness."
The nation’s largest department store organization opened four new Macy's stores and one furniture gallery in 2008 and reopened a New Orleans store damaged by Hurricane Katrina. In 2009, Macy's said it expects to open three new Macy's stores and one replacement store. Following the store closings announced today, Macy's, Inc. will operate 848 stores – 808 Macy's and 40 Bloomingdale's.
Year to date, Macy's sales are down 5.4 percent and same-store sales are down 4.6 percent. "The holiday shopping season ended with strong sales in the fourth and fifth weeks of December after a slow start to the month and unfavorable weather conditions in the Northeast, Midwest and Pacific Northwest," said Lundgren, calling it “the most challenging economic environment in memory.” He said the retailer did accomplish one holiday season objective: It reduced inventory by approximately 7.5 percent.
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