Macy’s Sales for First Quarter Hurt on Weak Spending by Tourists
Macy’s started this calendar year announcing the slashing of 4,500 jobs after a highly unusual weak holiday shopping season.
Now it appears as if customers did not want to shop at the chain of department stores during the recently ended quarter.
The retailer, based in Cincinnati continues experiencing poor sales because of a huge drop in spending by tourists and a failure of its selection of apparel to drive more traffic, said the company of its earnings report for the first quarter on Wednesday.
Terry Lundgren the CEO said that Macy’s experienced two straight years of declines in sales in the double digits by shoppers from overseas in its major tourism markets for both Macy’s as well as Bloomingdale’s.
Sales were down 7.4% ending the quarter at $5.77 billion a decline year over year that was due in some part by the shuttering of 41 stores during 2015.
However, that was far below Wall Street expectations of $5.93 billion. Investors were not happy. Shares of Macy’s fell by 6.86% during trading before the opening bell on Wednesday after the results were posted.
Lundgren explained the plans of the company to regain footing, including moving up the launch of its off price stores Macy’s Backstage as well as the Bluemercury beauty salons within many Macy’s stores.
Macy’s is also hoping the exclusive new launches of products that will take place going forward and large investment in mobile technology and customer service will help entice the shoppers to return.
A plan of unlocking value from its assets in real estate is still underway. Officials at Macy’s said they were evaluating many proposals from possible partners with regard to flagship locations and stores based in malls.
Facing much pressure to be more oriented to the digital world and to better cater to shoppers online, Macy’s has done a great deal of cost cutting for more than a year, slashing jobs, while closing some of its stores in an attempt to achieve leaner operations.
Just after the end of a holiday season with extreme competition, Macy’s announced the cutting of over 4,500 jobs over and above the already lost jobs due to the shuttering of 36 stores during 2016.
Macy’s was hard hit in particular by the unseasonably warm weather at holiday time, which meant that its customers did not have the desire to shop for winter coats as well as boots that were heavily stocked in Macy’s stores.