After reporting December sales figures on Thursday, Cincinnati-based Macy’s Inc. announced plans to close 11 underperforming Macy’s stores across the country.
The company said it would shutter locations in Los Angeles, Nashville, Tenn.; West Palm Beach, Fla.; and St. Louis, among others. A total of 836 associates are employed at the affected stores.
“The decision to close stores is difficult and often occurs when the market changes, new competing shopping centers are opened nearby to existing older ones, or when customers change shopping habits,” Terry Lundgren, chairman, president and CEO of Macy’s Inc. said in a statement. “While new store growth has slowed in the current economy, our long-term strategy is to continue to selectively add new stores while closing those that are underperforming.”
The company said the employees in “good standing” may be considered for positions at other stores. Employees who are laid off as a result of the closings will receive severance benefits and outplacement assistance.
Macy’s expects to incur $65 million in costs due to the store closings, $12 million of which will be cash. Most closing-related expenses will be booked in the fourth quarter of 2008.
This news comes on the heels of slumping sales reports for the month of December. Parent company Macy’s Inc. posted $4.4 billion in revenues, down 4.7 percent from the same period in 2007. Same-store sales were down 4 percent. For the combined November and December period, same-store sales declined even more steeply, at 7.5 percent.
Looking forward, three new Macy’s stores and one replacement store are slated to open in 2009, which will bring the retailer’s total door count to 812.