Macy's Closing 125 Stores Including Antioch Location, Tech Office In San Francisco
SAN FRANCISCO (CBS SF/AP) -- Retail giant Macy's announced it was making cuts including closing 125 stores, shedding some 2,000 corporate jobs and shutting down its tech center in San Francisco.
Tech offices in San Francisco will close its doors, as will a store in the East Bay. The Macy's in Antioch is the only location closing in the Bay Area. The company says it is restructuring, but many of the employees think there is another reason why their particular store is closing.
The tech center's operations will be moving to New York and Atlanta.
Sherry Wetzel and her sister have been a long time customers of Macy's in Antioch.
"It's a nice store. A lot of people hate to see it close," said Wetzel.
Macy's is only the latest store to call it quits in Antioch. This community has seen many of the anchor stores of the mall close.
"It's kind of odd. Gottschalks closed, Macy's is closing and Sears also closed," said Wetzel.
"I'm sad. I used to shop here when I was younger," said Saia Iongi.
Iongi not only used to frequent this store, he now works there.
He said he was not convinced on the idea that this store closing has anything to do with restructuring. Iongi told KPIX 5 that theft at the store is out of control. He said he sees thousands of dollars of merchandise walk out the store everyday.
"It was shocking to see people run out with handfuls of stuff. I've never seen anything like that," said Iongi.
Roughly 70 employees have been given their walking papers. Some are hoping to be transferred to another store.
"Now we have to find a new place, a new home," said Iongi.
Employees have been notified that the store will close sometime in March.
The store closures represent about one fifth of Macy's current total. The stores, which include about 30 that are in the process of closing, account for $1.4 billion in annual sales.
The corporate jobs will be shed as Macy's closes its offices in Cincinnati and San Francisco, leaving New York as its sole corporate headquarters.
Macy's is also testing a new smaller-store format that's located at a strip center, instead of a mall. The store will feature a mixture of Macy's merchandise and local goods as well as food and beverage options. It will open its first so-called Market by Macy's in Dallas on Thursday.
Macy's, like its peers Nordstrom and J.C. Penney, is dealing with stiffer competition and shoppers' changing behavior. Department stores are seeing their customers increasingly head to off-price stores like T.J. Maxx for fat discounts on name brands. They're also renting and buying second-hand goods online.
Macy's has pursued a number of strategies as a way to lure people back. Those include recently teaming up with resale site ThredUp. The company's Bloomingdale's division launched a rental service last year. And it's been expanding its off-price concept called Backstage in many of its stores.
It has also been upgrading the look of its top 150 stores in healthy malls.
Still, that hasn't been enough.
Macy's reported a steeper-than-expected 3.5% drop in sales at stores opened at least a year in its fiscal third quarter, which ended in Nov. 2. That marked Macy's first quarterly comparable store sales decline in almost two years.
Its business during November and December showed some improvement — same store sales fell 0.6%. But analysts say that the department store is losing market share. The company is set to report final fourth-quarter results later this month.
"We will focus our resources on the healthy parts of our business, directly address the unhealthy parts of the business and explore new revenue streams," said Jeff Gennette. who took the reins as CEO in early 2017.
The moves announced Tuesday come ahead of Macy's annual investor meeting where Gennette is expected to unveil a three-year reinvention plan.
Shares in Macy's Inc. slipped 8 cents to $16.55 in after-hours trading following the company's announcement. Over the past year, Macy's shares have declined nearly 36%.
© Copyright 2020 CBS Broadcasting Inc. All Rights Reserved. The Associated Press contributed to this report.
