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Macy's to close 14 stores, cut 1,300 jobs
[NEW YORK] US department store giant Macy's said on Thursday it would shut 14 stores, cutting more than 1,300 jobs, in a restructuring to boost its focus on the boom in online shopping.
The affected stores, a small fraction of the company's roughly 790 stores across the country, will be closed within several months, Macy's said in a statement after the markets closed.
Macy's also announced it would open two new stores in California.
The stores to be shuttered generate about US$130 million in annual sales, "some of which is expected to be retained in nearby stores and with online/mobile sales," the Cincinatti, Ohio-based company said.
The closings will eliminate 1,343 jobs, but Macy's said it expected that it will maintain its current staffing level of 175,000.
"Our business is rapidly evolving in response to changes in the way customers are shopping across stores, desktops, tablets and smartphones. We must continue to invest in our business to focus on where the customer is headed," said Terry Lundgren, Macy's chairman and chief executive, in the statement.
The company estimated that the restructuring changes will produce US$140 million in savings annually, beginning this year. It said it would book a restructuring charge of up to US$110 million in the 2014 fourth quarter.
Macy's also said that its comparable-store sales rose by 2.1 per cent in the November-December holiday shopping season compared with a year ago, in line with its forecast for an increase of 1.8-2.8 per cent in the fourth quarter.
The retailer confirmed its prior annual earnings forecast range of an adjusted US$4.25 to US$4.35 per share; analysts on average expect US$4.36. It raised its revenues growth estimate to 1.4-1.5 per cent from 1.2-1.5 per cent.
Shares in Macy's slid 3.1 per cent to US$65.71 in after-hours trade on the New York Stock Exchange.