Mediocre holiday sales in November and December has put Macy’s, Inc. (NYSE:M) and other retailers in the USA on the defensive. The unexpected warmer weather during the season impacted regular sales at Macy’s. A ‘shortfall’ of nearly 80% occurred in the sale items such as hats, coats and scarves.
“Mall Traffic was a Disaster”
Sales at mall stores were the weakest, this year according to market research firms. Britt Beemer of America’s Research Group said the ‘mall traffic is becoming a disaster.”
The reported fall in footfalls in shopping malls, was between 16% and 21%, this season. In 2014-15 the numbers were much higher at 25% to 28%. According to research firm RetailNext data, in-store traffic fell by 6.4% and sales by 2%.
Two mall set to close
Macy’s, Inc. (NYSE:M) wants to overcome the sales downturn at malls, by closing down those with lesser footfalls. Nearly 40 stores are expected to be closed in the coming quarters. It will also curtail operational expenses and cut-back on nearly 4,800 jobs.
Retail experts said that consumers appeared reluctant to spend, despite better employment and weak gasoline prices that strengthened spending power.
Macy’s, Inc. (NYSE:M) proposes to close down two of its mall outlets – Irvine Spectrum as well as Country Club Plaza, Sacremento. The third mall location at Westfield Century City will soon be replaced by a new store in 2017.
The announcement of the closure of Macy’s store saw mixed reaction at Irvine Co. Owners, of the retail property, Irvine Co. Retail Properties, were upbeat about the closure, as they can now add more retail stores to the same floor space.
Other loyal buyers were however disappointed that Macy’s, Inc. (NYSE:M) was moving away from store front marketing for ecommerce.
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