Macy's will shutter 11 stores in 9 states; N.C. spared
Posted January 8, 2009 8:19 a.m. EST
Updated January 8, 2009 9:07 a.m. EST
NEW YORK — Department-store operator Macy's Inc. said Thursday it will close 11 underperforming stores in nine states - affecting 960 employees - and lowered its forecast for the fourth quarter after one of the weakest holiday seasons in years.
Stores slated to close include locations in Los Angeles, West Palm Beach, Fla., Nashville, Tenn., and St. Louis, among others. Cincinnati-based Macy's Inc. says the closures will cost about $65 million, most of which will be booked in the 2008 fourth quarter.
Clearance sales at the stores begin next week.
None of North Carolina's North Carolina stores were affected.
Stores to be closed are located in:
* Ernst & Young Plaza (Citicorp Plaza), Los Angeles, CA (135,000 square feet; 136 employees; opened in 1986)
* The Citadel, Colorado Springs, CO (195,000 square feet; 105 employees; opened in 1984)
* Westminster Mall, Westminster, CO (156,000 square feet; 110 employees; opened in 1986)
* Palm Beach Mall, West Palm Beach, FL (190,000 square feet; 71 employees; opened in 1979)
* Mauna Lani Bay Hotel, Island of Hawaii, HI (3,000 square feet; 3 employees; opened in 1983)
* Lafayette Square, Indianapolis, IN (160,000 square feet; 84 employees; opened in 1974)
* Brookdale Center, Brooklyn Center, MN (195,000 square feet; 72 employees; opened in 1966)
* Crestwood Mall, St. Louis, MO (166,000 square feet; 176 employees; opened in 1969)
* Natrona Heights Plaza, Natrona Heights, PA (73,000 square feet; 124 employees; opened in 1956)
* Century III Furniture and Clearance, West Mifflin, PA (83,000 square feet; 3 employees; opened in 2000)
* Bellevue Center, Nashville, TN (211,000 square feet; 76 employees; opened in 1990).
"These closings are part of our normal-course process to prune underperforming locations each year in order to maintain a healthy portfolio of stores," said Macy's Chief Executive Terry J. Lundgren in a statement.
Employees at the stores that are closing may be considered for open positions at other Macy's stores, the company said.
Department-store operators have been among the harder-hit in the retail sector as consumers cut back amid the recession, hunting for bargains and trading down to discounters.
Macy's reported Thursday that its December sales at stores open at least a year, or same-store sales, fell 4 percent - still not as bad as the 5.3 percent drop analysts surveyed by Thomson Reuters were expecting.
Total sales for the five-week period ended Jan. 3 fell 5 percent to $4.4 billion from $4.61 billion last year.
Same-store sales fell 7.5 percent during the combined November and December holiday period. Macy's said the holiday season ended with improving sales in the fourth and fifth weeks of December but that sales were sluggish before that.
The company said it marked items down sharply in the fourth quarter to gain sales and reduce its inventories, but that hurt its margins and led it to lower its profit forecast for the fourth quarter and full year.
Macy's now expects earnings of 90 cents to $1 per share in the fourth quarter, down from its previous guidance of $1.10 to $1.30 per share. Analysts expect earnings of $1.11 per share.
For the full year, the company now expects to earn $1.10 to $1.20 per share, down from its previous forecast of $1.30 to $1.50 per share. Analysts expect a profit of $1.35 per share.