Macy’s will shutter roughly 125 stores, a fifth of its locations, and is slashing about 2,000 positions over the next three years.
The retailer said Tuesday that it will be eliminating 9% of its corporate and support positions. And after previously saying it would close 28 locations, it says it will now shutter nearly 100 more and concentrate top leadership roles in New York.
The job cuts and store closures come in the wake of Macy’s sales continuing to slide during the critical holiday season.
“We will focus our resources on the healthy parts of our business, directly address the unhealthy parts of the business and explore new revenue streams,” Jeff Gennette, Macy’s chairman and CEO said in a statement.
Macy’s, once the template of what it meant to be a luxury department store, has struggled to reinvent itself at a time when the popularity of online shopping has crippled one time retail giants like Payless and Toys R Us.
The stores that will be shutting their doors collectively account for $1.4 billion in sales, but individually are poor performers, and based in what the company deems to be “lower tier” malls.
Among the stores that remain open, there will be job cuts “in some stores and increases in others,” Macy’s said in a statement.
Additionally, it is shutting its San Francisco offices that handled tech functions, shifting those tasks to New York City and Atlanta.
Macy’s also cut jobs last year, announcing in February that it would pare roughly 100 positions at the vice-president level and above to streamline its leadership and become more nimble.
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The updated restructuring plan is projected to produce roughly $1.5 billion in annual savings.
Macy’s was likely to reveal more details during its investors day, taking place on Wednesday.
It has been experimenting with new shopping experiences in its “Growth 50” locations, and wooing shoppers with the option of picking up their online purchases at an actual store. But some retail watchers say that may not be enough.
“The further closure of stores at Macy’s is a sign that the company is still failing to provide consumers with the right product at the right price,” Neil Saunders, managing director of the retail consultancy Global Data said in an investors note. “It’s weak understanding of what shoppers want, and it’s failure to adapt to changes in the market, means Macy’s has lost relevance.”
Still, he added, “it is good to see Macy’s cutting out dead wood before it affects the rest of the business.”
Follow Charisse Jones on Twitter @charissejones