Macy's Prepares Contingency Plans amidst Slumping Sales
Macy’s, one of the biggest department store chains in US, announced its new contingency plans amidst slumping sales and low consumer demand. To cut costs, the retailer giant said it will lay off 7,000 workers, or 4 percent workforce and will offer product lists according to the needs of a certain location.
Macy’s, one of the biggest department store chains in US, has announced to adopt a new contingency plan that will include workforce reduction by 4 percent, or 7,000 employees from various store branches across the country.
Forty percent of the impending layoff will come from corporate positions in centralized management offices and the remaining 60 percent accounts for store employees.
The retailer giant said it will also change its marketing structure. Instead of providing the same product lists from all its store branches, the company will offer product selection that will meet the needs of a certain location.
According to Macy’s, the cost-cutting measures will allow the company to save around $400 million starting next year.
Earlier, the retailer giant announced its plan to reduce its dividend by 5 cents from 13 cents, allowing the company to save nearly $140 million this year.
Macy’s shares also slumped to 4 percent or 36 cents, settling at $8.59 per share. Meanwhile, its stock lost nearly 70 percent of its value in 2008 when the US housing industry collapsed and credit-crunch triggered economic slowdown.
Macy’s is not the only department-store company reeling from the economic recession as majority of US retailers including JCPenney and Nordstrom also reported slumping sales, forcing them to offer big price discounts and incentives to lure consumers to buy.
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