Macy’s department store lays off employees and closes stores to cope with declining sales
Macy’s Inc., the largest clothing retailer in the United States, has been suffering from layoffs and store closures since last year, which has further affected corporate performance. According to Macy’s financial report, the group’s full-year net profit during the reporting period was US$1.07 billion, a decrease of 29.9% from US$1.53 billion the previous year.
Macy’s fourth quarter financial report showed that the group achieved a net profit of US$543 million in the quarter, a year-on-year decrease of 31.5%. Fortunately, same-store sales fell by 4.3%, which was slightly narrower than the same period last year and better than expected. Terry Lundgren, CEO of Macy’s Department Store, expressed confidence that the group can stabilize sales levels this year. It is understood that according to the November and December 2015 holiday season results announced by Macy’s in early January, Macy’s same-store sales recorded a 4.7% decline, lower than the group’s previous expectations of 2%-3%. Industry analysts believe that as temperatures turned colder in the United States after January, winter accessories such as previously unsalable sweaters, coats, and boots began to sell well. The relief of high inventory pressure was an important reason for the narrowing of Macy’s same-store sales decline.
Affected by the sluggish traditional retail environment, Macy’s has seen constant news of layoffs and store closures. The layoffs announced at the beginning of this year are also seen by the industry as a signal that Macy’s is unable to get out of trouble. In January this year, Macy’s announced that it planned to lay off thousands of employees and provide voluntary separation opportunities to about 165 senior executives, thereby cutting costs by $400 million per year. On the other hand, according to foreign media reports, Macy’s will close 40 physical stores this year. Macy’s department store lays off employees and closes stores to cope with declining sales
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