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Macy's turns out the lights

Posted Jan 08 2009, 01:28 PM by Anthony Mirhaydari
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After a terrible holiday shopping season, Macy's (M) announced the closure of 11 of its 859 locations as it fights to return to profitability in what company executives call "the most challenging economic environment in memory." 

The company also limited its December same-store sales decline to a better than expected 4% by sacrificing margins through heavy discounts. Analysts were expecting a 6.2% drop. Fourth-quarter earnings guidance was revised down to between 90 cents and $1 a share from $1.10 to $1.30.

For the operator of its namesake and Bloomingdale's department stores, these store closures aren't likely to be the last as the retail landscape -- especially for mall anchors -- changes dramatically. The problem is that the mass market discounters like Target (TGT) and Wal-Mart (WMT) are moving upmarket in apparel quality and style while offering the value and convenience consumers are seeking right now. As an example, down at my local Wal-Mart I noticed half decent $99 wool-blend overcoats next to a rack of bean dip and tortilla chips.

To fight off these competitive threats Macy's, through its My Macy's localization effort, is trying to cater its merchandise assortment and in store décor to better connect with customers and offer something more than a generic shopping experience. The initiative involves roughly 230 stores, but its efforts could be delayed due current economic woes. The company also plans "to continue to selectively add new stores while closing those that are underperforming."

The list of stores to be closed can be found below. Final clearance sales are to begin within the next week.

Disclosure: The author does not own or control shares in any of the companies mentioned.

Anthony Mirhaydari is a contributor to the Strategic Advantage investment newsletter. He can be contacted at anthony.mirhaydari@live.com. Feel free to comment below.

Related reading:

Holiday 2008: The kiss of death for retailers

January is a hot month at thrift stores

How to give holiday gifts for free

The day the malls stood still

Comments

 

Does anybody remember how easy it used to be to go to a Robinsons May and find exactly what you needed at a fairly good price. Macy's swallowed them up as well.

I NEVER SHOP AT MACY'S.  THERE PRICES HAVE ALWAYS BEEN SO MUCH HIGHER THAN OTHER RETAIL STORES.  ALSO JUST TRY TO FIND ONE SALES ASSOCIATE WHO REALLY WANTS TO HELP YOU AT MACYS.  IT CAN NOT BE DONE.

WAL MART killed American retail business.

They ushered in the era if cheaply made imported goods.

Macys and others had to do likewise in order to survive.

This resulted in a loss of decent paying jobs.

Now no one can afford to even shop at WAL-MART.

Sometimes people cant stand the truth.

Every department store is in trouble because of Walmart.

Nobody can afford to shop  they were driven out of business by Walmart,

Just wondering where Indianapolis is?  I thought it was in IN (Indiana) last I knew!

I have major issues with this store, back around christmas iwas in my local MACY's I was dressed down, due to lots of errands to run that day, and was at one of the many perfume counters at the store and was left waiting almost 20 minutes so that the "ASS-ociate" working the counter could wait on all the suits and Ties that came to the counter after I did. I was outraged. I asked the lady helping the others if she realized that was therebefore the other 3 people she waited on before me. She said yes, but they looked like they were in a bigger hurry than I. Well I said well I happen to be in a hurry also I told her to get to another store and walked out and haven't been back since. I mean honestly how can you run a RETAIL Store like that????

The store in Mansfield Ohio is a joke!  They moved from one end of the mall to another (when they merged with Maycompany) and they chose the older, outdated store! It is so dark and dingy I feel like I am shopping in Goodwill instead of a Macys!  And in this store there is so much in the mature ladies section (sag harbour, etc) and really nothing in the 20-30 age group for business wear, etc.  I used to find wonderful things on the clearance racks but why bother when you can't see what you are purchasing.  Then their coupons have so many stipulations why bother?  I'd rather just shop online....

Big box retailers still do not have a clue...Look at BKE, AROW, and other small retailers. Still showing profit in 2008...The problem isn't the price it's the service! My thoughts, put down the merchandising photos and help people. It is that easy...Go retail...

Macys is so much better than Kohls. Did you ever get service at a Kohls?

Tj Maxx and Marshalls buy the clearance that Macys and other major retailers

couldn't sell off their 80% off racks and then mark it back up. Coupons have ruined the retailers, it is the only way to get the cheap skates into the stores and

they still aren't happy. I worked in retail for 32 yrs and everybody wants it for

nothing, thats why they can't hire enough help.

Worked for Macy*s 5 years. The first 3.5 were an outstanding experiance, mostly because of my fellow workers. They were tireless and proud, however when Macy*s accuired Foleys here in Texas, this all came to a halt. The Foleys people were horrible, they lied, would not work, took credit for others work to keep thier jobs. Slowly they mannaged to run all of the original Macy*s people out;(some with many years servitude) The service is at best abnoxiuos if not down right poor.One would think Foleys bough Macy*s, if not why did not Macy*s protect thier loyal but gone workers? Who cares seems to be the norm for everything now days.

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