According to Reuters, on January 18, local time, the US department store chain Macy’s said that it would lay off 2,350 employees and close 5 stores starting on January 26 to streamline operating costs.
The report quoted information disclosed by Macy's Department Store as saying that in order to meet changing consumer and market demands and deploy new strategies, the company will significantly lay off employees this month. It is reported that the layoffs account for 3.5% of Macy's total employees. The wave of layoffs at Macy's comes after a team consisting of Arkhouse Management and Brigade Capital made a $5.8 billion private takeover offer for Macy's.
According to reports, Macy’s new CEO Tony Spring is working to cut promotional expenses and increase profits to help the company recover from excess inventory in 2022. At the same time, Macy's will also close five stores in Virginia, California, Florida and Hawaii early this year.
Macy's is a well-known large chain retailer in the United States, headquartered in New York City and has been established for nearly 166 years. In addition to its namesake stores, the company also owns beauty and skin care store Blue Mercury and high-end department store Bloomingdale's.
In recent years, Macy's performance has been impacted by the rapid development of e-commerce and the COVID-19 epidemic, and its business scale has continued to shrink. In February 2020, the company announced it would lay off approximately 2,000 employees and close 125 stores within three years. As of October 28, 2023, the company had 723 stores in the continental United States.
In an earnings call in October, Macy's Chief Financial Officer and Chief Operating Officer Adrian Mitchell revealed that the company would conduct another comprehensive review of its stores.
He emphasized that in order to provide products that are more in line with consumer needs, more competitive prices and a better shopping experience, Macy's will "optimize and adjust the layout of our physical stores."
"We remain committed to bringing more daily inspiration to our customers and look forward to sharing more details about the strategies and strategies that drive the company's long-term profitable growth during our upcoming fourth-quarter conference call," said Mr. Mitchell.
In addition, he also revealed to investors during the meeting that Macy’s plans to close less than 10 stores in early 2024. This decision is one of the optimization adjustments made by the company after conducting a comprehensive store evaluation.
Since the beginning of this year, American retailers have been in a difficult situation, and some radicals have even claimed that the United States is experiencing a "retail apocalypse" at this moment. Although this statement is somewhat exaggerated, it is undeniable that many retailers, including Macy's, are or have suffered a heavy blow due to the combined effect of multiple factors.
A set of data released by S&P Global provides us with strong evidence. According to statistics, as of November 2023, as many as 591 U.S. companies have filed for bankruptcy. This number has set a new record for the number of bankruptcy filings by U.S. companies since 2020.
It is particularly worth noting that consumer retail companies top the list of bankruptcy filings, with a total of 76 filing for bankruptcy, highlighting the tremendous pressure the industry is facing.
