Home / Knowledge / News / Apparel/Garments / Macy's cost cutting to save $400mn in SG&A
Macy's cost cutting to save $400mn in SG&A
08
Jan '16
US apparel retailer Macy's said it will reduce SG&A expense by approximately $400 million while still investing in growth strategies, particularly in omnichannel capabilities at Macy's and Bloomingdale's.

“The actions represent progress toward the company's previously stated goal of re-attaining over time an EBITDA rate as a per cent of sales of 14 per cent,” a Macy's press release stated.

As part of the program, the retailer will consolidate the grouping of existing Macy's stores into five regions and 47 local districts, down from the current structure of seven regions and 58 local districts.

“This reflects a smaller portfolio of stores and new technologies and techniques for managing the store business and tailoring assortments to local customer preferences,” the company added.

Adjusting staffing levels at each Macy's and Bloomingdale's store will be in line with current sales volume to increase productivity and improve efficiency.

An average of three to four positions will be affected in each of Macy's and Bloomingdale's approximately 770 going-forward stores, out of an average workforce of around 150 associates in each store.

However, Macy's also added that roughly 50 per cent of affected store associates are expected to be placed in other positions.

It will also consolidate the four existing Macy's, Inc. credit and customer services center facilities into three and the call center in St. Louis will be closed in spring 2016, affecting around 750 employees.

Work currently performed in St. Louis will be divided among existing credit and customer services centers in Tempe, AZ, Clearwater, FL, and Mason, OH, where a total of about 640 positions will be added.

The company has begun a search for a senior-level real estate executive to join the company to oversee and manage real estate activities, including the leadership of any partnerships or joint ventures.

The company listed 40 Macy's store closings out of a current total of about 770 Macy's stores and of the 40, 36 will be closed in early spring 2016, consistent with its announcement in September 2015.

The 40 Macy's stores being closed account for approximately $375 million in annual sales, some of which are expected to be retained in nearby stores and with online or mobile sales.

According to Macy's, the implementation of cost reductions is estimated to generate annual SG&A savings of approximately $400 million, beginning in 2016.

This will help the company to achieve modest improvement in its EBITDA rate as a percent to sales in 2016 compared with 2015 excluding gains from the expected sale of real estate in Brooklyn.

In conjunction with the announcements, as well as incremental asset impairment charges related to store closings, around $200 million of charges, of which around $165 million is expected to be cash.

These charges were not previously included in earnings guidance provided by the company and are in addition to the $111 million, or 20 cents per share, booked in the third quarter. (AR)

Fibre2Fashion News Desk – India


Must ReadView All

GMAC urges Cambodia to push fabric-forward rule in RCEP

Apparel/Garments | On 17th Oct 2017

GMAC urges Cambodia to push fabric-forward rule in RCEP

Representatives from the Garment Manufacturers Association of...

Alibaba to invest $15 billion in DAMO Academy for research

Textiles | On 17th Oct 2017

Alibaba to invest $15 billion in DAMO Academy for research

Alibaba will invest $15 billion over the next several years in its...

Pressure on  Indian textiles exporters to ease by Q3: ICRA

Textiles | On 17th Oct 2017

Pressure on Indian textiles exporters to ease by Q3: ICRA

Pressures on the profit and debt levels of textiles exporters is...

Interviews View All

Riddhika Shah
SS Homme

'Worsted wool is the ideal fabric for menswear'

Spokesperson
Hugo Boss

'Hugo Boss works with carefully selected sourcing partners'

Karel Williams
Dow Microbial Control

'Silvadur is most rapidly adopted in areas where hygiene-conscious and...

Vikas Banduke

Softech Controls Private Limited (SCPL) is a part of the Cotmac Group, an...

Nitesh Mittal

Kusumgar Corporates is a leading manufacturer of technical textiles and...

C Dhandayuthapani

MAG Solvics Private Limited was established in 1991 to design and develop...

Paolo Ocleppo
Sandvik Hyperion

Paolo Ocleppo, Rotary Cutting Segment manager, Sandvik Hyperion discusses...

Ashok Desai
Bombay Textile Research Association

Bombay Textile Research Association (BTRA) is a leading name in textile...

Marten Alkhagen
Swerea IVF AB

Marten Alkhagen, Senior Scientist - Nonwoven and Technical Textiles of...

Robert Brunner
Devereux

Golfwear and menswear brand Devereux is set for greener pastures. Robert...

Aditi Somani
Aditi Somani

Aditi Somani specialises in luxury fusion wear with international cuts and ...

Sanjukta Dutta
Sanjukta's Studio

<b>Sanjukta Dutta</b> creates unique garments by clubbing prints of...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

October 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category


Related Categories:

Planning to Take the Leap towards
Sustainability?

Do you see sustainability as a route to business growth?

Yes No

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes No

Active Poll

Do you see sustainability as a route to business growth?

Yes
76.9%
No
13.8%
Skip
9.2%

Total Votes: 65

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes No

Active Poll

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes
61.5%
No
27.7%
Skip
10.8%

Total Votes: 65

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes No

Active Poll

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes
84.6%
No
10.8%
Skip
4.6%

Total Votes: 65

Thanks for your valuable feedback. Claim your free latest sustainability e-book.

Active Poll

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes
73.8%
No
12.3%
Skip
13.8%

Total Votes: 65


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search