(RepublicanJournal.org) – One of America’s most famous department stores is struggling for survival. Macy’s, the New York icon famous for its annual Thanksgiving parades, plans to close stores and let thousands of its employees go. The chain has spent years trying to adapt itself to the challenge of online retailing; it looks like it hasn’t found the solution yet.
On January 18, the Wall Street Journal reported that Macy’s aims to cut costs by closing five of its 508 stores and shedding 2,350 staff, about 3.5% of its permanent workforce. According to the chain, this is part of a plan to streamline the company so it’s better placed to compete with online retailers.
Among other things, Macy’s plans to outsource some jobs — although it’s not saying which ones — and automate parts of its supply chain. The company says this is “a new strategy to meet the needs of an everchanging (sic) consumer and marketplace,” but it looks like Macy’s is having trouble staying profitable. It’s common for businesses to lay off staff in January if the holiday season went poorly, but according to the Department of Commerce, Americans spent strongly in December. Of course, that doesn’t mean they were spending at Macy’s.
The price of Macy’s stock peaked at $73 a share in 2015, but since then it’s fallen by almost 75%. When markets closed on January 22, a Macy’s share was selling for just $18.26 — although that was figuring in a 3.5% rebound from Friday. In the same period, the company has closed almost 300 stores.
The latest five stores to close will be in Arlington, Virginia; San Leandro, California; Simi Valley, California; Lihue, Hawaii; and Tallahassee, Florida. Macy’s has also started notifying staff who are about to lose their jobs, with the layoffs due to begin on January 26.
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