Retailer Macy's to cut 2,500 jobs and shut five stores
- Published
The retailer has been hurt by sluggish demand from cash strapped US consumers
Retailer Macy's said it will cut 2,500 jobs and shut five stores as part of a reorganisation plan.
Stores will close in Arizona, Kansas, New York, Utah, and Missouri.
Macy's operates 840 stores in 45 US states under the Macy's and Bloomingdale's names and has approximately 175,000 employees.
The retailer also said holiday sales rose 4.3% compared to the same period last year. But it lowered its forecast for 2014 sales growth to around 2.8%.
Macy's said the job cuts and store closures will save $100m per year and it forecast a profit for this year which was well above analysts forecast.
Macy's boss Terry Lundgren said : "We have identified some specific areas where we can improve our efficiency without compromising our effectiveness in serving the evolving needs of our customers".
Shares rose more than 5% in after hours trading after the announcement.
Tough environment
Overall, US retailers posted their lowest holiday sales growth in four years, according to ShopperTrak, a research firm.
Many retailers, including Wal-Mart and Target, were forced to slash prices to lure shoppers through their doors.
Retail sales between Thanksgiving and Christmas rose 2.7% compared to 3% last year, according to ShopperTrak and the total number of US consumers walking into stores declined 14.6% amid growing online sales.
Macy's rival JC Penney said it was "pleased" with its holiday sales, but did not provide any details, which disappointed investors and shares tumbled 10%.
- Published2 January 2014