By Maria Armental
Macy's Inc. announced plans on Thursday to change how it stocks
and sells clothing and other items saying it is trying to respond
to a shift in consumer shopping.
The retailer, which started in 1858 as a dry goods store on the
corner of 14th Street and 6th Avenue in New York City, said it will
strengthen its e-commerce, open more outlet stores and is
considering off-price retailing, much like T.J. Maxx and Ross
Stores Inc.
"We must continue to invest in our business to focus on where
the customer is headed---to prepare for what's next," Chief
Executive Terry J. Lundgren said in a news release.
The restructuring, which will affect more than 2,000 workers
nationwide, is expected to save the retailer about $140 million a
year, starting in 2015, and result in about $100 million to $120
million in charges in the fourth quarter of 2014.
Macy's workforce is expected to remain at about 175,000.
Macy's plans to merge purchasing and selling at retail and
online stores for both Macy's and Bloomingdale's and adjust retail
operations, including cutting the number of workers at stores.
The company also will close 14 stores in the early spring, which
roughly account for a combined $130 million in sales, though the
closings will be partially offset with some planned openings,
including a store expected to open in Abu Dhabi in 2018 under a
license agreement with Al Tayer Group.
Also on Thursday, the retailer said sales at existing stores
rose 2.7% in the nine weeks ending Jan. 3, in line with the
company's projection of 2% to 3% growth for the fourth quarter.
The retailer, which affirmed its financial projections for the
year, said it now expects fourth-quarter same-store sales to
increase between 2.5% to 3%, from its previous view of 2% to
3%.
Online sales drove the growth, particularly at Macy's and
Bloomingdale's, Mr. Lundgren said, noting the company also saw
positive results from a program that was tested in eight markets
allowing customers to buy online and pick up orders the same day at
their selected store.
"These innovations demonstrated the power of the stores working
in collaboration with online and mobile to satisfy customer demand
no matter how the customer is shopping," Mr. Lundgren said.
Macy's is scheduled to report results for the quarter on Feb.
24.
Shares, which set a 52-week-high on Thursday trading at $68.30,
fell nearly 3% to $65.95 in recent after-hours trading. Through
Thursday's closing, the company's stock was up 31% over the past 12
months.
Write to Maria Armental at maria.armental@wsj.com
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