NEW YORK CITY, NY – The veteran department-store chain, Macy’s, has announced it will lay off about 3.5% of its workforce, roughly 2,350 employees, while also shuttering five of its stores. This move highlights the company’s strategic shift as it diligently adapts to a thriving online shopping era.
Synonymous with the holidays and known for anchoring the nation’s greatest shopping malls, Macy’s is a beacon in American retail history. The inaugural store was christened in 1858 and the brand portfolio now boasts about 500 Macy’s-branded stores, along with 55 locations from the upscale chain, Bloomingdale’s. The iconic company is also a significant cultural marker, widely recognized for sponsoring the Thanksgiving Day Parade in New York City and serving as the backdrop for the holiday film favorite, “Miracle on 34th Street.”
However, the company’s stronghold in the retail landscape has been under increased scrutiny as competitor forces rise and consumer behavior shifts. The move to online shopping, accelerated by the global pandemic, has taken its toll on department stores, forcing disruptive changes within the industry.
In a statement provided to CNN, a Macy’s spokesperson shared that, “As we prepare to deploy a new strategy to meet the needs of an everchanging consumer and marketplace, we made the difficult decision to reduce our workforce by 3.5% to become a more streamlined company.”
Typically, retailers opt to let go of employees and close stores following the end-of-year holiday season, particularly if they experienced a sluggish sales period. However, the Commerce Department disclosed that Americans actually stepped up their spending pace in December, an unexpected departure from the annual pattern.
In what could be seen as fortifying move, a group of investors reportedly approached the company with a private takeover proposal. This offer arrived during a particularly vulnerable time for Macy’s. The company, however, has not released any official commentary regarding the activist attempt.
Throughout recent years, penetrative efforts to rejuvenate the business have been plentiful. Macy’s initiated new brands, experimented with smaller stores, overhauled technology, and tried other various tactics to invigorate their performance and connect with younger shoppers. Despite some promising early returns, these initiatives have not sufficiently veered the company’s declining trajectory.
Compounding these challenges, Macy’s continues to face a significant drop in its stock price, seeing a 75% plunge from a peak of $73 per share in 2015. The store reduction strategy has led to the closure of approximately 300 stores, leaving a network of around 700 across the brand.
Macy’s sweeping reductions spotlight the fierce urgency to evolve and adapt in an environment where consumers can instantly price compare and shop from the comfort of their homes. The restructure indicates Macy’s recognition of the shifting retail landscape and their intention to move with the times.
Despite these challenges, the Macy’s brand still possesses a tremendous amount of equity and goodwill. The company can leverage its rich history, capitalize on its iconic status and possibly realize a renaissance through innovation and resilience amidst today’s digital disruption. As Macy’s navigates its course through this transformation, generations of loyal customers and fresh potential patrons alike will watch with anticipation, hoping for another Miracle on 34th Street.