Macy’s Inc. (Cincinnati) announced plans to close five stores and lay off 2500 employees as part of a large 2014 cost reduction.
Despite solid holiday sales, Macy’s will also make some operational changes to improve its efficiency.
The stores to be closed are in the Fiesta Mall (Mesa, Ariz.); Metcalf South Shopping Center (Overland Park, Kan.); Jamestown Mall (Florissant, Mo.); Medley Center (Irondequoit, N.Y.); and Fashion Place Mall (Murray, Utah). All of these locations are at least 20 years old, and the Overland Park store is 46 years old.
The internal changes include: reducing the number of regional offices from nine to eight, combining the Midwest and North regions to create a new North Central region; reducing the number of store districts from 69 to 60; eliminating the district planner role for soft home categories in the merchandise planning organization; and trimming certain central office, administrative and back-of-house expenses across the company, including reductions in workforce as well as non-payroll costs.
The company said it expected to save about $100 million a year with the changes, beginning this year.
At the same time, Macy’s announced five new Macy’s stores and three new Bloomingdale’s stores to open in the next three years. The new Macy’s are at University Town Center (Sarasota, Fla.); Shops at Summerlin (Las Vegas); Mall at Bay Plaza (The Bronx, N.Y.); Plaza Del Caribe (Ponce, P.R.); and Mall at Miami Worldcenter.
The new Bloomingdale’s stores will be in the Stanford Shopping Center (Palo Alto, Calif.); Ala Moana (Honolulu); and Mall at Miami Worldcenter.
“Our company has significantly increased sales and profitability over the past four years,” said ceo Terry Lundgren. “We have identified some specific areas where we can improve our efficiency without compromising our effectiveness in serving the evolving needs of our customers.”
Macy’s and Bloomingdale’s same-store sales grew 3.6 percent in November and December.