Department stores are struggling on both sides of the ocean: in order to avoid the same fate as ailing German group Galeria, well-known luxury department store chain Macy’s is going to cut as many as 2,350 jobs and close five department stores altogether.
Five locations close
The five locations that are to close are two department stores in California and one each in Florida, Hawaii and Virginia. The company is also cutting management positions. Later this month, the liquidation sale will start in the affected stores.
“As we prepare to deploy a new strategy to meet the needs of an ever-changing consumer and marketplace, we made the difficult decision to reduce our workforce by 3.5 percent to become a more streamlined company”, Macy’s said in a statement to The New York Times.
On verge of takeover?
The reorganisation comes at a time when the company is changing CEOs and possibly also owners. In December, investor groups Arkhouse Management and Brigade Capital Management reportedly made a bid of 5.8 billion dollars (5.4 billion euros) to take Macy’s off the stock exchange. The listed company did not yet give a definitive answer, but it is already certain that a new CEO will start in February. Tony Spring will then succeed Jeff Gennette, who had been in that position since 2017.
Macy’s still has 720 department stores in the United States and also owns Bloomingdales and Bluemercury, but is under increasing pressure. Profits have been falling for years, but now that consumer spending on clothes has fallen, sales are also dropping. Last financial year (between September 2022 and September 2023), sales in physical shops fell by as much as 7 %.