The business stories that matter, by Fortune's Colin Barr
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December 28, 2007, 2:34 pm

Macy’s to workers: Happy New Year!

This just in from Fortune’s Suzanne Kapner:

Macy’s (M) delivered an inauspicious holiday gift to 900 employees this afternoon, when the huge department store retailer disclosed plans to close nine stores.
 
Like other department store retailers, Macy’s has suffered from lackluster sales this holiday season. To try to spur last minute holiday shopping, the company took the unusual step of keeping eight stores in the metro New York area open round the clock in the days leading up to Christmas.
 
But, in fact, Macy’s troubles date back further, to the 2005 acquisition of the May Department Stores. In the wake of that deal Macy’s, formerly known as Federated Department Stores, closed dozens of overlapping stores.
 
Given the company’s middling performance this year, analysts had suspected that further store closings were in the works. In an interview earlier this month, Macy’s Chief Executive Terry Lundgren told Fortune: “We always go through the normal process of pruning our real estate portfolio, but there are no plans for a wide-scale closure of stores.”
 
Despite Macy’s troubles, the company continues to open stores in areas it considers more promising. Macy’s opened 10 new department stores in 2007 and one furniture gallery. Some five stores are expected to open in 2008 and six to eight new locations are on the table for 2009.
 
The stores slated for closure, in Ohio, Texas, Louisiana, Indiana and Utah, are located in regions that have been some of the weakest for Macy’s. The company said it would try to relocate displaced employees to nearby stores when possible - cold comfort for the remaining Macy’s workers who will start the New Year jobless.
 

Yeah, well some of your stores were falling apart anyway. As my wife can attest to, since the glass door fell on her when she walked into your store. Over 4 months and she is still hurting ($2.5K - yeah right) Who knows a good lawyer? Contact us with a serious offer.

Posted By Pat Stanford / Homestead / Florida : January 14, 2008 4:01 am

Going forward, Macy’s will continue to see a decline in their sales because the quality of their merchandise has decreased. Everyone is talking about it! Also, the presence of a professional work staff is decreasing. In the Macy’s north stores they have instituted a Black dress code. Which signals a uniform mentality that will trick the general public into feeling that they are being waited on by service professionals. The fact is that they have severed many of their higher earning employess, employees that have been around since the days of Marshall Fields, and Hudsons. These associates drove sales! The simple fact of the matter is that Macy’s will continue to mold themselves into the next Wal-Mart. And they will do it on the backs of their associates, many of which have left for better paying positions.

Posted By Pietrie, Ypsilanti Michigan : January 5, 2008 6:42 pm

I feel terrible for these employees. Losing a job like this right after Christmas is a terrible thing for the company to do. Again, people are being hurt by Lundgren and the other incompetents on Macy’s board of directors. But hey, Macy’s has certainly become expert at that type of thing. That, plus their lousy merchandise is one of the many reasons why I boycott them.

A Marshall Field’s curse upon them all!

Posted By Paul, Chicago, IL : January 1, 2008 8:46 pm

All this chatter about the evil and the loss of jobs despite the slaying of a human, all told people in the U.S. will suffer. I do believe the firm will do its best in attempts to either relocate a job or severance out individuals. Will this be tough? It will be tough. Did the corporation do the right thing in acquiring the May stores? It is done and one can argue endlessly about the future foreseen at the time. Macy’s is trying to survive the mistakes made along with unforeseen economic and weather related issues. Closing a single store is very difficult emotionally. Hopefully the firm will go forward as thousands of jobs are at stake.

Posted By Susan Freid, Nutwood NJ : December 30, 2007 7:51 pm

Well that what happens when they try to eat up too chains at once. Maybe Macy’s vision of national dominance is over.

Posted By Margaret, Queen Creek,AZ : December 29, 2007 12:33 pm

The store closing in Dallas was in awful shape, it hasn’t been renovated in so long it’s no surprise that it’s closing. The merchandise mix was lousy and the place was always a mess. There are some wonderful employees and I’m sure that they’ll be able to transfer to many of the other Macy’s in the region. The management of the store though should be retrained or fired for not working with what they had.

Posted By Jack, Dallas, TX : December 28, 2007 11:48 pm

I agree with Erik, they are in such close proximity it makes sense. Plus underperforming stores close. New stores open. Location is essential. On another note, job loss is sad and tough. I would have loved to have seen this approached w/more sensitivity.

Posted By LB, Dallas, TX : December 28, 2007 10:04 pm

Once again its a case of the highly paid executives making the mistakes and Joe Worker paying for them with their jobs

Posted By J Dahlke, Chicago, IL : December 28, 2007 9:08 pm

So many responses with so little understanding of the facts. Here’s one:

The Dallas store that is closing (Valley View) is less than a mile away from another store remaining open (Galleria), and less than 10 miles from the next-closest store (Northpark Mall). I expect normal employee turnover will allow absorption of the workers without too much angst. Once I did some research, I was actually surprised that there were two so close together (I shop at the Northpark location, so no need to go to the other two), so closing one makes sense.

Posted By Erik Nelson, Dallas, TX : December 28, 2007 5:51 pm

Tish, Paul

Stop changing the subject. The subject is Macy’s lack of consideration for people to fire them at such an awkward time. “Creative Destruction” is a lot of bunk if your on the receiving end. I don’t expect to keep the same job for ever. But some human decency would be nice.

Posted By Wayne Schmand, Lebanon NJ : December 28, 2007 4:56 pm

I agree that the title of this article “Happy New Year” is completely insensitive and inappropriate. I too expect more from Fortune.

Posted By Al, Tampa, Florida : December 28, 2007 4:12 pm

To worker, I suppose you’re right that it’s rank sarcasm to say happy new year on this occasion, but one assumes this is how the news is received by the workers in question. To Paul, I agree with your take though I reserve the right to cry about whatever I want, reality or otherwise. To Trish, I don’t see how pointing out that 900 people are getting fired between Christmas and New Year’s amounts to blaming capitalism, but you and I may have to agree to disagree there.

Posted By Colin Barr, Hugetown, NY : December 28, 2007 4:09 pm

Business is business. I cannot see why you are complaining about capitalism. Please explain how you blame capitalism for the fact that you lost your job. Are you in-turn saying that you wish all place would stay open so you could keep your job, even though that would be an unwise business move?

Posted By Trish, Minneapolis, MN : December 28, 2007 4:04 pm

Capitalism always has had, and always will have, creative destruction. You note that they are opening new stores. Change is life. That is why all people who are in the workforce need to be constantly updating their skills and abilities. It is almost impossible to have a single career in one company any more. Just a fact. Thus, one must be thinking about being flexible, adaptable and creative, seeking to improve. I’ve been “creatively destructed” several times. Each time, new doors opened and the new opportunities that emerged were very satisfying as well as well paid. It’s tough, very tough, no doubt, but crying about reality doesn’t do anything except to make one feel angry and miserable.

Macy’s also has an obligation to create opportunities for its employees to upgrade skills. Toyota does this brilliantly. As a result, the Toyota Tacoma is built in Fremont, CA using US labor instead of Japan, as originally planned. Competent, visionary management matters.

Posted By Paul, Shelton, WA 98584 : December 28, 2007 3:52 pm

Is it really necessary to make smart alec type comments about workers getting laid off. ‘macy’s to workers: happy new year!’

Is it also necessary to use bad puns when discussing a serious issue like people getting laid off. ‘cold comfort for the remaining macy’s wokers…’ would you use that type of wording for a serious news piece such as the death of Bhutto.

I suppose thats the media today having to be cutesy, sarcastic teenagers. I thought fortune was immune to that.

Posted By worker, atlanta, ga : December 28, 2007 3:05 pm
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