Macy’s pushes forward with closures, job cuts
A “solid” holiday shopping season won’t offset looming job cuts and store closings at Macy’s
The department store giant said its same-store sales increased 1.0% in the months of November and December 2017 combined, setting the stage for a positive fourth quarter. Active apparel, shoes, dresses, coats, fine jewelry, men’s tailored clothing, children's and home were all top performers. Beauty was also a highlight and showed a marked improvement in trend, with particular strength in fragrance, prestige skincare and cosmetic gifting, the company said.
“We saw improved sales trends in our stores and continued to see double-digit growth on our digital platforms,” said Jeff Gennette, Macy’s CEO. “ We intend to close the fourth quarter in a good position and head into 2018 with momentum.”
The company announced the closing of 11 Macy’s stores, four of which were previously disclosed. With these closures, the retailer will have completed 81 of the approximately 100 planned store shutterings it announced back in August. It intends to close approximately 19 additional locations as leases or operating covenants expire or sale transactions are completed. Including the stores announced today, Macy’s has closed 124 stores since 2015. (See end of story for list of stores scheduled to close in early 2018.)
Macy’s also said it is making staffing adjustments across the stores organization with reductions in some stores and increases in others, and is further streamlining in some non-store functions. According to a report by USA Today, Macy’s will eliminate a net total of about 5,000 job positions, including the closures and reductions at remaining locations.
The company expects annual expense savings of $300 million from its actions beginning in fiscal-year 2018, which it intends to reinvest in the business. It also anticipates one-time charges of approximately $160 million, or approximately 33 cents per share, (of which approximately $115 million is expected to be cash) to be booked in the fourth quarter of 2017 for restructuring activities, asset impairment, store closings and other costs.
Macy’s chief executive said the company’s primary focus in 2017 was to continue the growth of digital and mobile, stabilize its store business and set the foundation for future growth.
“We’ve made good progress on each, including encouraging trend improvements in our brick & mortar business,” Gennette said. “A healthy store base combined with robust digital capabilities is Macy’s recipe for success. Looking ahead to 2018, we are focused on continuous improvement and will take the necessary steps to move faster, execute more effectively and allocate resources to invest in growth.”
The following Macy’s stores will be closing in early 2018. In most cases, clearance sales will begin on January 8, 2018, and run for approximately 8 to 12 weeks.
- Laguna Hills Mall, Laguna Hills, CA *
- Westside Pavilion, Los Angeles, CA*
- Novato (Furniture), Novato, CA
- Stonestown Galleria, San Francisco, CA *
- The Oaks, Gainesville, FL
- Miami (Downtown), Miami, FL
- Magic Valley Mall, Twin Falls, ID*
- Honey Creek Mall, Terre Haute, IN
- Birchwood Mall, Fort Gratiot Township, MI
- Fountain Place, Cincinnati, OH
- Burlington Town Center, Burlington, VT
*Previously disclosed closure
Pet owners show preference in purchasing from brick-and-mortar stores
Although there has been an uptick in e-commerce when it comes to pet owners, many prefer to purchase products such as food for their four-legged family members from brick-and-mortar locations like PetSmart and Petco.
This information comes from the latest market research report from Packaged Facts titled, Pet Food in the U.S., 13th Edition. The report takes a look at the comprehensive overview of the market size, projections, cross-market-trends and acquisitions. The report also studied the wide range of products available to consumers which contain special claims, exotic proteins and grains aimed towards winning over pet owners.
Pet Food in the U.S., 13th Edition states that about 88% of dog owners and 93% of cat owners admit to purchasing food for their pets from a store within the last 12 months. One demographic most comfortable with non-traditional purchasing options are millennials. This group was more likely than any other to buy items through a website or app for home delivery or in-store pickup.
Packaged Facts also notes that in 2017, pet retailers strengthened online offerings without ignoring their brick-and-mortar locations. PetSmart added 63 locations in its first three quarters and opened its 1,600th store. Petco operates more than 1,500 stores and Pet Supplies Plus has 400 locations in the nation.
Longtime legislative advocate of OTC, VMS to retire
A staunch legislative advocate of the dietary supplement and over-the-counter medicine industries earlier this week announced his retirement from the Senate. On Tuesday, Sen. Orrin Hatch, R-Utah, announced on Twitter that he will not be defending his Senate seat in 2018.
"When the President visited Utah last month, he said I was a fighter," Hatch said in a video posted on Twitter. "I've always been a fighter. I was an amateur boxer in my youth and I've brought that fighting spirit with me to Washington. But every good fighter knows when to hang up the gloves. For me, that time is soon approaching."
“Of all of Sen. Hatch’s achievements, his commitment to the dietary supplement consumer will be celebrated most by this industry,” stated Steve Mister, president and CEO of the Council for Responsible Nutrition. “Sen. Hatch has been a champion of dietary supplements to be sure, but his insistence on a common sense approach to legislation and regulation has always managed to strike the important balance between safety and access in pursuit of promoting public health.”
“As we reflect on Senator Hatch’s many policy achievements over four decades in the U.S. Senate, his contribution to the healthcare of our nation is particularly impressive," added Scott Melville, president and CEO of the Consumer Healthcare Products Association. "In addition to his authorship of landmark legislation with Congressman Henry Waxman, spearheading pharmaceutical innovation, Sen. Hatch has been a tireless advocate for responsible self-care and measures that empower consumers through access to over-the-counter medicines and dietary supplements."
Hatch, who formed and led the Dietary Supplement Caucus in the Senate, co-authored the landmark legislation that established a rational framework for regulating dietary supplements, the Dietary Supplement Health and Education Act of 1994. The senator also played a critical role in passing the Nonprescription Drug & Dietary Supplement Consumer Protection Act of 2006 (which established a mandatory post-market surveillance program for dietary supplements); enacting the Food Safety Modernization Act in 2011 (that added extra safety precautions for manufacturing food, including dietary supplements); and helped shepherd the passage of the Designer Anabolic Steroid Control Act of 2014 (that helped protect consumers from illegal drugs masquerading as dietary supplements)—all of which strengthened consumer confidence in dietary supplements.
Sen. Hatch used his considerable influence to prod FDA to issue final Current Good Manufacturing Practices regulations in 2007 and to elevate FDA’s Division of Dietary Supplement Programs to Office status in 2016, both of which strengthened FDA’s oversight of dietary supplements that nearly 76 percent of Americans turn to for better health and wellness.
Sen. Hatch was awarded CHPA’s prestigious Ivan D. Combe Lifetime Achievement Award in 2006, which is bestowed upon an outstanding individual whose actions have created a positive impact on consumer healthcare.
“Sen. Hatch leaves behind a historic legacy of legislative accomplishment and his leadership and sense of humor will be greatly missed in the Senate," Melville said. "We offer him our most heartfelt thanks for his tireless dedication to better healthcare, including self-care. We look forward to continuing to work with the Senator throughout the remainder of his term, and wish him well in his well-deserved retirement.”
"CRN and the entire dietary supplement industry wish Senator Hatch all the best in this next chapter of his life," Mister added. "His hard work and dedication have well-served consumers of our products. The majority of Americans who take dietary supplements can have confidence that responsible companies in this industry will do their part to honor Sen. Hatch’s legacy by continuing to bring safe, quality dietary supplement products to the market."