According to Reuters, the US department store chain Macy's said on January 18 local time that it would lay off 2,350 employees and close five stores starting on January 26 to streamline operating costs.
The report quoted Macy's as saying that in order to meet the changing consumer and market needs and deploy a new strategy, the company will significantly reduce its workforce this month, it is reported that the layoffs account for 3.5% of the total number of Macy's employees. The wave of layoffs at Macy's comes after a team made up of Arkhouse Management and Brigade Capital made a $5.8 billion take-private offer for the company.
Macy's new CEO Tony Spring is focusing on cutting promotional spending and boosting profits to help the company recover from an inventory glut in 2022. Macy's will also close five stores in Virginia, California, Florida and Hawaii early this year.
Macy's is a well-known large chain retailer in the United States, headquartered in New York City, has been established for nearly 166 years. In addition to its namesake stores, the company also owns Blue Mercury, a beauty and skincare store, and Bloomingdale's, a high-end department store.
In recent years, Macy's performance has been impacted by the rapid development of e-commerce and the new coronavirus epidemic, and the scale of operation has been shrinking. In February 2020, the company announced it would cut about 2,000 jobs and close 125 stores over three years. As of October 28, 2023, the company had 723 stores in the United States.
During an earnings call in October, Adrian Mitchell, Macy's chief financial officer and chief operating officer, revealed that the company would be taking another comprehensive look at its stores.
He stressed that in order to provide more responsive products, more competitive prices and a better shopping experience, Macy's will "optimize our physical store layout."
"We are always committed to bringing more everyday inspiration to our customers, and look forward to sharing more details on our strategy to drive long-term profitable growth in future Q4 conference calls," said Mr. Mitchell.
In addition, he also revealed to investors during the meeting that Macy's plans to close fewer than 10 stores in early 2024. This decision is one of the optimizations made by the company following a comprehensive store evaluation.
It's been a tough year for American retailers, with activists declaring that they're experiencing a "retail apocalypse" in the United States. While this is an exaggeration, there is no denying that many retailers, including Macy's, are or have been hit hard by a combination of factors.
A set of data released by Standard & Poor's Global provides us with strong evidence. According to statistics, as of November 2023, as many as 591 U.S. companies have filed for bankruptcy, which sets a new record for the number of bankruptcy filings in the United States since 2020.
Of particular note, consumer retail companies topped the bankruptcy filing list, with 76 filing, underscoring the intense pressure the sector is facing.
