Roller Coaster Week for Macy's
It was a rough week for Macy’s, people. 2,500 jobs cut. January same-store sales down 7.1%. Let’s just put that into perspective: sales are nowhere near expectations across the board. A survey of 43 retailers by the UBS-International Council of Shopping Centers indicated that January sales were only up 0.5%, a percentage point below the anticipated 1.5%. Macy’s, on the other hand, anticipated their sales were going to be down 4 to 6%.
Retailers across the board are concerned. Clark Howard didn’t have kind things to say about Macy’s and predicts the downturn is going to mean good deals on merchandise are ahead:
Mid-priced and high-end retailers have been reporting terrible January sales figures. This trend was not expected when you consider that sales of gift cards were slightly up during the holidays. The only retailers who made out OK were the deep discounters and warehouse clubs. Macy's has just announced they're going to be cutting more than 2,000 jobs amid their January sales decline of 7 percent. When you factor in inflation, the mega-retailer has fallen off a cliff. Part of the problem has been the company's corporate arrogance. They decided all their goods had to be self-branded and got rid of their beloved Marshall Field's imprint (and a lot of warm, fuzzy customer goodwill in the process).
This downward trend in retail means there are going to be deals in the mass affluent market (Coach, Tiffany, etc.) and at mid-priced clothing retailers...
But Macy’s has a plan. It’s called “My Macy’s.” They’re consolidating their seven regional divisions into four--which includes the elimination of the former Marshall Field’s headquarters in Minneapolis and the elimination of 2,500 jobs across the country--and will empower local managers and merchandisers to make more decisions in an effort to “localize” the stores.
Gone is Frank Guzzetta, Macy’s North chair, who was given $10 million last fall to invest in a three-year plan to make the State Street store fashionable again. According to Macy’s Web site, he “will retire as [he] had previously planned in spring 2008.”
So is the elimination of the former Marshal Field’s headquarters the final nail in the coffin of Field’s? Or is “My Macy’s” the beginning resurgence of locally-branded stores? These thoughts are percolating a hot debate over at Field’s Fans Chicago. But one thing they are not debating: their boycott is working. In fact, as Macy’s marked new, low milestones this week, Field’s Fans marked a high point for them: 100,000+ protest leaflets distributed on State Street and elsewhere, and nearly 100,000 “Keep it Marshall Field’s” buttons and lapel stickers distributed world-wide.
But amongst the cheering, they’re also mourning. “Gail” posted on their blog:
To the hundreds and hundreds of former Marshall Field's employees in Minneapolis who have lost their jobs this week: Thanks for all the great memories. For years you helped to bring us a wonderful shopping experience at Marshall Field's. We will never forget the great store that you helped build.
Macy's store image via Macy’s Inc.