Fashion Place Mall Macy's to close as part of restructuring
Cincinnati • Macy's Inc. is cutting 2,500 jobs as part of a reorganization to sustain its profitability, and the Fashion Place Mall store in Murray will close next week.
The announcement comes on the heels of a strong holiday shopping season for the department store chain.
Macy's said Wednesday that it will reassign or transfer some workers and add some positions, leaving its workforce level at about 175,000.
The Cincinnati-based company plans to close five stores and open eight others, leaving it with 844 stores nationwide once the changes are complete.
The Fashion Place Macy's is one of its smaller locations at just 26,000 square feet, but it employs 42 associates. It has been open since 1988. Unlike other locations, which will offer final clearance sales for 10 to 12 weeks, the store will close Jan. 12 with no sales.
Macy's says the moves will save it $100 million per year and forecast a 2014 profit above Wall Street's forecasts.
Macy's has been a standout among its peers throughout the economic recovery and has reaped the benefits of its strategy of tailoring merchandise to local markets. But like other merchants, Macy's is grappling with a still cautious shopper. It's also trying to respond to shoppers' shift toward buying and research on their PCs and mobile devices like smart phones.
Macy's also shifting merchandising responsibilities for "soft home categories" like sheets and towels from the district level to the regional and national level. Macy's says that such goods change less often than clothing and accessories and are less subject to local tastes.
The moves come after a solid holiday shopping season for the chain. Revenue at stores opened at least a year, a key indicator of a retailer's health, rose 4.3 percent in November and December.
The company is optimistic about this year. It expects earnings per share of $4.40 to $4.50 in 2014, besting analysts' prediction of $4.36 per share, according to FactSet.
"Our company has significantly increased sales and profitability over the past four years, and we have created a culture of growth at Macy's Inc.," said Terry J. Lundgren, Macy's chairman, president and CEO in a statement. "As the success of these strategies has unfolded, 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 5.5 percent to $54.70 in after-hours trading after closing down 34 cents to $51.84.