Macy’s Inc. is restructuring its business in response to changing customer tastes. The company will close 14 of its nearly 800 stores and cut some marketing and merchandising jobs. It plans to plow the resulting $140 million in annual savings into efforts to improve omni-channel selling and may also launch an off-price division to compete with the likes of T.J.Maxx or Nordstrom Rack.
“Our omni-channel strategy depends on great Macy’s and Bloomingdale’s stores that not only welcome shoppers through the door and deliver an outstanding shopping experience, but that also fulfill orders that are shipped directly to customers around the country,” said Terry J. Lundgren, Macy’s chairman and CEO, in a press release.
Last year some $1 billion of direct-to-customer shipments originated from Macy’s and Bloomingdale’s stores, he said. “We continue to maintain a very strong nationwide network of stores through an ongoing process of selectively adding new locations while also trimming those that no longer meet our performance requirements, where the real estate can be redeployed to more productive uses, or where our leases were not renewed.”
A single merchandising and marketing organization will support all the Macy’s Inc. online and in-store businesses to encourage store and digital growth alike, Lundgren says. Previously, store and online assortments were purchased and marketed by separate organizations at the two banners.
Plans this year include creating a team to explore opportunities for any Macy’s off-price business; boosting the technology and customer experiences of Macys.com and Bloomingdales.com; and increasing direct-to-consumer fulfillment capacity in every full-line Macy’s and Bloomingdale’s store. Macy’s is expected to expand its San Francisco–based digital-technology organization by hiring about 150 people, says Lundgren.
