US retailer Macy’s cost cuts to eliminate 2,500 jobs
09 Jan 2014
Macy's Inc, the second-largest US department-store company, forecast profit for its next fiscal year ahead of analysts' estimates and announced a cost-cutting programme that would eliminate around 2,500 jobs.
According a statement by the Cincinnati-based company, profit per share in the year through January 2015 would be $4.40 to $4.50. The job cuts and other actions would save the company around $100 million a year, the retailer said in a separate statement.
At a time when many retailers have been struggling with falling consumer spending, Macy's chief executive officer Terry Lundgren has managed to keep profit growing with the addition of competitively-priced exclusive merchandise.
He had also increased online sales by executing web orders from store inventory.
Bloomberg quoted Richard Jaffe, an analyst at Stifel Financial Corp as saying in a phone interview that the fact that Macy's could take $100 million of costs out of the equation was a nice thing. He added one could increase earnings by reducing costs.
According to the retailer's announcement yesterday, it would close five stores in early spring, including the store at 9501 Metcalf Avenue in Overland Park as also one in the Jamestown Mall in Florissant, Montana, a St. Louis suburb. Clearance sales would start Monday and run for 10 to 11 weeks.
''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,'' Lundgren, said in a statement yesterday. ''We have identified some specific areas where we can improve our efficiency without compromising our effectiveness in serving the evolving needs of our customers.''
