As an associate of 3 years, I've seen a thing or two of what works and is not working. Firstly, JG is trying to turn a profit by shutting stores down... shrinking yourself won't turn a profit. You cannot continue to shrink your store count every year and not make changes. Sears tried this and look where they are now. Another thing, and this is probably the most important, is merchandise and store inventory levels. You CANNOT keep buying the same merchandise season after season with minor changes to it and expect sales to continue. Karen Scott, time to go. I cannot tell you how many KS and INC stuff we send back as penny salvage. We need new, fresh brands that can actually speak to people and actually SELL. Lastly, stock the damn stores. You never walk into a Dillard's or Nordstrom that is empty of stock. No stock looks bad and sends the wrong message. Stop allowing fulfillment to take ALL that we have of a particular item and then wonder why our sales for the day are no good.
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Granted you have a valid point with EBIT and Stock levels is spot on with where M will be.
EBIT is defined as company's net income before income tax expense and interest expense have been deducted. But certainly this is not a primary factor to closing a store or a number of stores.
Sure closing a profitable (vs non-profitable) store may not be a simple choice, but it has to be done with other factors as well. Do you own or lease the space in a Mall ( is the mall an A,B or C mall)? Mall traffic and location, what are the sales trends for the last 3, 5 or 8 years? Current operational expense and condition of the store? Total number of associates just to name a few.
Closing stores is an expense reduction to reduce total overhead, to help achieve higher sales in your successful locations, but this may not drive long term growth. Yet another reason for store closings is the leveraged buyouts of retail companies by private-equity firms that saddle the retailers with tremendous amounts of debt.
M was already very large and needed to downsize prior to the pandemic, and that in turn accelerated the issues, as it did with other Mall Anchors. Another big issues is that retail is simply over-stored, this is a supply versus demand imbalance to the fact that retail sales growth has been too tepid to account for an increase in retail real estate.
Online buying has shown the weaknesses of malls and stores that simply do not have a footprint (let alone personal) designed for this type of business. We all know that the fulfillment rooms have kept growing in size on all of our stores. But how long can this continue before your simply run out of room to expand? You do need to have some fitting rooms right? Or are the neighborhood stores going to become fulfillment centers? If so location is key for this to happen, and how much stock do you keep in your smaller stores? The large departments stores are something of the past, the next generations will not need three to five floors of merchandise to walk around and touch.
In September, Macy's Inc. Chairman and CEO Jeff Gennette said the timeline for permanent store closings could be adjusted as the company monitors the competition and the recovery from the pandemic. These words alone articulate this is an ongoing process of evaluation and tough choices ahead.
"We are going to emerge out of this as a smaller company,” Chief Executive Officer Jeff Gennette said. Well here again we see that we need to reduce the size for several reasons and he is letting us all know that the company will be smaller in the future.
M isn't simply dropping off the retail map or going away soon. But look at the last five years alone as to what positions have been eliminated and what has been created and then eliminated and current staffing levels. Expense reduction is critical for M currently (as well as Online sales) to stay relevant in the retail world. It's not doom and gloom but a hard reality for the company.
@7qtp+19PEloQm
Go ahead and keep drinking that corporate kool aid
You should t post when you know nothing about the business you are in.
Closing stores definitely helps profit. The stores we are closing are running at a negative ebit... im sure with your 3 yr tenure, you know what ebit is.
Also, cutting our stock orders saved us through the covid closure and the reopening to fewer customers. The other stores you mentioned, that are so full , are stuck with all that merchandise which they will have to markdown a few times to liquidate. This means they take a loss on it.
Also, we are buying merchandise, but as you know with your 3 yr tenure, merchandise is bought six months to a year out, so we wont be fully stock until fall 2021. Even then, we wont ever go back to the capacity we were used to, because we want a faster turn.
The store I’m currently at will definitely be in the 3rd round of closings next year. We’re a “neighborhood” store which is the kiss of death. We’re also just like 15 minutes from another Macy’s in a better mall. Sadly, our store is newer and much prettier and even better at getting new accounts. Even better in % over last year when it comes to $$$ compared to the “Golden child” 15 minutes away from us. Just the samel, we’ll be gone next year at this time. LOL, we already can tell now by the deliveries we get and the request for sending fixtures to other locations!
Customers coming in and asking if we are closing every week because inventory levels are so low. Even competitors that are in bankruptcy like Dillard's have way more inventory than our stores and we are losing customers and it has little to do with the pandemic. Jeff says he's happy with our inventory levels and won't even let us talk about the lack of inventory during store visits.
Shrinking will not turn a profit, but it does reduce overall cost. You must be able to control expense before anything else. AKA stop the bleeding.
Like tool of trade or should I say tools for the fools!
Amen.
That’s why Macy’s will turn into Sears and jcpenny within 1.5 years . Macy’s used to sell nice stuff. Now it’s all polyester Chinese c-ap