Macy's closing two Los Angeles-area stores
Macy's Inc. announced last year that it would be closing up to 40 stores by the end of 2016, and on Wednesday it had two Southern California stores listed amongst those it will shutter.
The two stores that will close are the Macy's at Irvine Spectrum and the Macy's at Westfield Century City. With the Century City location, it will be replaced with a new, larger store to open in the same shopping center in spring 2017.
The stores to be closed represent $375 million in annual sales, which Macy's expects will be absorbed by nearby stores and online sales.
Cincinnati-based Macy's (NYSE: M) is also closing its St. Louis call center in the spring, affecting 750 employees. The company expects to consolidate the duties of that call center to three other existing ones, including one in Mason. About 640 positions will be added to those other call centers.
In addition to closing 40 stores, Macy's is consolidating its store groupings from seven regions and 58 local districts to five regions and 47 local districts. It's adjusting staffing levels in all of its stores, affecting about 3,000 employees nationwide. The company expects about half of those to be laid off and the other half moved to different positions. It's reducing an additional 600 back-office positions, with about 150 of those being reassigned to other positions.
The company said it will offer affected employees positions in nearby stores where available, and eligible full-time and part-time employees who are laid off because of the closings will be offered severance benefits.
Macy's estimates that the closings will save the company $400 million beginning in 2016, which will bring about a "modest improvement" in its earnings before interest, taxation, depreciation and amortization, the company said in a news release.
In addition to the new store in Century City, Macy's is also adding new Macy's stores in Kapolei, Hawaii, and Murray, Utah along with new Bloomingdale's locations in San Jose, California. and Norwalk, Connecticut.
"In today's rapidly evolving retail environment, it is essential that we maintain a portfolio of the right stores in the right places," Macy's CEO Terry Lundgren said in a news release. "So we will continue to add stores selectively while also being disciplined about closing stores that are unproductive or no longer robust shopping destinations because of changes in the local retail shopping landscape."
As the Cincinnati Business Courier previously reported, Macy's is offering buyouts to 165 senior executives. About 35 percent of those positions will not be replaced.
Macy's also announced Wednesday that it has engaged Eastdil Secured in conjunction with Credit Suisse and Goldman Sachs to approach potential interested parties to form joint ventures to utilize the company's mall-based properties as well as its flagship real estate in Manhattan, San Francisco, Chicago and Minneapolis.
Macy’s operates 885 stores in 45 states, the District of Columbia, Dubai, Guam and Puerto Rico under the Macy’s, Bloomingdale’s, Boomingdale’s Outlet and Bluemercury brands.