Macy’s plans to lay off 2,500 workers and close five department stores this spring in cost cutting moves, the company said Wednesday.
While sales and profits have increased over four years, “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 Inc. CEO Terry J. Lundgren said in a statement.
Also on Wednesday, 93-year-old retailer Loehmann’s said it is going out of business and closing 39 stores in 11 states.
Loehmann’s, an upscale off-price retailer, will be selling more than $65 million worth of inventory in going-out-of-business sales starting Thursday.
Macy’s layoffs will result from a reorganization of the chain’s regional structure, the elimination of some district planner roles and cuts in some store positions and administrative expenses. Because of job growth in online operations and new stores, the workforce is expected to stay at about 175,000 workers.
Changes planned at Macy’s are expected to save an estimated $100 million per year, the company said.
The company will close stores in Mesa, Ariz.; Overland Park, Kan.; Florissant, Mo.; Irondequoit, N.Y.; and Murray, Utah. Including planned new stores, the company will operate 844 stores under the Macy’s and Bloomingdale’s banners.
In the Loehmann’s announcement, the company blamed a declining economy in key markets such as California, New York, Florida and the Midwest, as well as intense competition from off-price and online retailers. After failing to sell the business in November, Loehmann’s filed for Chapter 11 bankruptcy protection in December.
Source: MCT Information Services