Macy’s to shut 125 stores and axe 2,000 jobs

The American department store chain wants to pull out of weaker shopping malls across the country and focus on launching smaller format stores in strip malls.

It is also bidding to slash almost 10% of its headcount in central functions, with 2,000 job losses planned across its headquarters in Cincinnati and its San Francisco technology hub, which will be closed. All of its tech functions will be carried out at offices in New York City and Atlanta instead.

Macy’s radical cost-cutting plans come just a month after it reported a disappointing Christmas trading period. Like-for-like sales slipped 0.6% at its owned and licensed stores in November and December, though this beat analysts forecasts of a 1.7% decline.

Macy’s chief executive Jeff Gennette said: “We are taking the organisation through significant structural change to lower costs, bring teams closer together and reduce duplicative work.

“The changes we are making are deep and impact every area of the business, but they are necessary. I know we will come out of this transition stronger, more agile and better fit to compete in today’s retail environment.”

Macy’s executives are set to meet investors in New York later today to further outline their plans.

Its travails highlight the rapidly changing face of US retail as a number of traditional names grapple to compete against the rise of online players like Amazon.

The likes of Sears, Barneys and Toys R Us have gone bust in recent years, while the likes of JCPenney and Kmart are also closing stores.

Analysis by Business Insider revealed that retailers had plans to close more than 9,300 stores last year as they adapted to changing consumer habits.

By contrast, Amazon revealed last week that it had its best-ever Christmas, raking in a profit of $3.3bn during the last three months of 2019.