Macy’s Inc (NYSE:M) started 2018 off by announcing plans to close 11 stores. The biggest surprise was, seven of the stores were previously unidentified locations. Four stores that were previously scheduled to close included three in California. Macy’s recently filed three Worker Adjustment and Retraining Notification (WARN) reports with the State of California Employment Development Department noting that three locations and 436 employees will be laid off on March 18, 2018.
The three California Macy’s store locations being permanently shuttered include Laguna Hills Mall, Laguna Hills (affecting 111 employees); Westside Pavilion, Los Angeles (128 employees); and Stonestown Galleria, San Francisco (197 employees). Clearance sales began on January 8 and are expected to run for two or three months.
Macy’s has yet to file a WARN report stating when it expects the Novato (Furniture) location to close and how many employees will be affected. That said, a typical Macy’s location employs around 100 people.
The Cincinnati-based department store chain is shuttering stores at a blistering pace as it looks to cut costs and reverse its declining sales in the face of increased competition from online retailers.
In the third quarter of 2017, Macy’s announced that revenue declined 6.1% year-over-year to $5.28 billion. Comparable store sales slipped 3.6%. This was the company’s 11th consecutive quarterly decline in revenue.
Macy’s Store Closings in 2018
In 2016, Macy’s announced a number of initiatives aimed at driving profitability. That included shuttering 100 Macy’s full-line stores, or 15% of its store base. The company said most of those closures would occur in 2017.
The store closures announced in January of this year are part of the plan announced in August 2016. So far, 81 of those 100 stores have either closed or their closures have at least been announced.
Macy’s said it will shutter another 19 stores, in addition to the 11 announced on January 4, as their leases expire.
The four store closures previously announced are Laguna Hills Mall, Laguna Hills; Westside Pavilion, Los Angeles; Stonestown Galleria, San Francisco; and Magic Valley Mall, Twin Falls, Idaho.
The seven Macy’s locations that were not initially expected to close are: Miami (Downtown), Miami, FL; The Oaks, Gainesville, FL; Novato (Furniture), Novato, CA; Honey Creek Mall, Terre Haute, IN; Birchwood Mall, Fort Gratiot Township, MI; Fountain Place, Cincinnati, OH; and Burlington Town Center, Burlington, VT.
After this round of store closures is complete, Macy’s will have less than 600 stores. In 2014, it had nearly 800.
Conservatively, that means, since 2014, Macy’s has laid off more than 20,000 employees. More layoffs will be on the way. The retail apocalypse is expected to see a record 12,000 stores close in 2018.
If Macy’s could surprise the retail industry by announcing the closure of seven new stores, chances are good it will unexpectedly announce the closure of additional underperforming stores in 2018. And along with it, hundreds and hundreds of layoffs.
“WARN Report,” State of California Employment Development Department, last accessed January 17, 2018.
“Macy’s, Inc. Reports Third Quarter 2017 Earnings Above Prior Year and Re-affirms Full-Year Guidance,” Macy’s, Inc., November 9, 2017.
“Macy’s, Inc. Outlines Moves to Drive Profitable Growth and Enhance Shareholder Value,” Macy’s, Inc., August 11, 2016.
“Macy’s is closing 11 stores — here’s where they will shut down,” Business Insider, January 4, 2018.