It's a tough week for Macy's employees and shareholders. After a lackluster holiday season, the retail behemoth is tightening its belt for the year ahead. The company suffered a 4.7 percent decline in the last two months of the year as compared to 2014. "We were particularly disadvantaged by the historically warm weather in northern climate zones," Macy's CEO and chairman Terry Lundgren said in a press release. He attributed 80 percent of the sales drop to a lack of interest in outerwear and cold-weather accessories.
But Lundgren and his team, responsible to shareholders, can't sit around and wait for better shopping weather. Yesterday, Lundgren announced a long list of changes that he will oversee for the company, which also includes Bloomingdale's, in 2016. Many are particularly painful; layoffs number in the thousands, and many stores will close. The company is planning many financial moves — but here are the five main things to know about the big Macy's news:
- Employees are being laid off. A reported 4,500 workers will be let go due to closings and restructuring. The company hopes to offer some employees at closing stores jobs elsewhere, if possible.
- Stores will close. The company said 40 Macy's stores will close, about five percent of its current 770 locations, most in the early Spring.
- But new stores in different locations will open. Five locations are planned to open in 2016, with new stores in Kapolei, HI; Los Angeles; Murray, UT; San Jose, CA; and Norwalk, CT. Macy's is also introducing 50 more "Macy's backstage" discount stores, some of which live inside big Macy's locations.
- There will be sales. For anyone living near one of the closing stores, be prepared for major sales. Closeout discounts will be offered for eight to 10 weeks before the locations close.
- Macy's has one serious asset: its real estate. The Macy's flagship store in Manhattan is sitting on real estate estimated last year to be worth $3 billion to $4 billion. This gives the company a lot of flexibility. So don't expect Macy's to be going anywhere just yet.