Thursday, August 11, 2016

More Good News from the Obama/Clinton Economy.....100 Macy's will be closed!

New York Post August 11, 2016 by Lisa Fickenscher
Macy’s is closing 100 stores and Wall Street rewarded it with a standing ovation.
Shares shot up nearly 17 percent Thursday after the nation’s biggest department store chain announced the closures and pointed to an improvement in sales trends after six straight quarters of declines.
Slimming down the 748-store count by 14 percent is a key part of Macy’s turnaround strategy, which also includes leveraging its significant real estate assets.
The retailer is selling its highly successful men’s store in Union Square, San Francisco, with plans to reinvest the valuable real estate proceeds in other parts of the company, such as beefing up its digital bona fides.
“We now believe we are set up well to proceed to a comeback,” Macy’s Chairman and CEO Terry Lundgren said in a statement. “Our sales strengthened month-by-month throughout the second quarter. This trend improvement gives us confidence in our plans for the back half of the year, and in our strategic planning for improvements to our business model going forward.”

Total revenue declined 3.9 percent to $5.87 billion in the quarter ended July 30, but that was better than a 7.4 percent decline in the first quarter. Same-store sales fell 2 percent compared with a 5.6 percent drop in the first quarter.
Management attributed the improvement to hot weather trends, which drove shoppers into stores, as well as more tourists shopping in its major flagship stores.
The company did not identify which stores it will close and said some may remain open past this year depending on their current lease expirations.
“While it will shrink the company somewhat, these closings will help us to accelerate our growth,” CFO Karen Hoguet during an earnings call with analysts.
Macy’s estimates the sales decline from the loss of those stores will cost it as much as $1 billion next year. Earlier this year, the company said it would close 41 stores.
Macy’s did not disclose how many jobs would be lost, but the Retail, Wholesale and Department store Union in New York said Macy’s problem is not too many stores but a poor shopping environment.
“Macy’s needs to create an atmosphere where customers want to come to their stores,” said Stuart Appelbaum, president of the union, which represents 8,000 Macy’s and Bloomingdale’s employees in the New York metro area. “Macy’s trying to just become another Amazon would be a mistake.”
Macy’s earned $11 million, or 3 cents per share, in the quarter ended July 30, compared with $217 million, or 64 cents, a year ago. Excluding one-time items, per-share earnings were 51 cents, topping the 48-cent estimate of analysts.
The stock was up 16.9 percent, to $39.75, in early afternoon trading.
(I was just in Macy's 34th St today and it was bustling. So it is not closing anytime soon. Where it will close is in shopping centers all over the country where it is the "anchor store." You are familar with that I am sure. A Macy's or a Sears or JC Penny sets up in a mall and a bunch of other stores tie on and operate in the same area. Once the big guy goes the rest of them fail. So your mall becomes a ghost town. You know who has a lot to do with this. Amazon. Trump made noises about looking at Amazon's anti-trust wise because of his problems with the Washington Post and Jeff Bozo. I don't know if that will have any effect. But just think of all the jobs lost and the income lost and other businesses that will go belly up because of this. It is not pretty.)

16 comments:

Dad Bones said...

Would busting up Amazon have any value to us as consumers or does Trump just want his friends to get in on the action?

edutcher said...

Yeah, I thought the economy was doing so well it was one of the reasons Hillary is winning.

Dad Bones said...

Would busting up Amazon have any value to us as consumers

Does the idea of Bezos as a pauper sound good or bad?

Trooper York said...

I don't know Dad. How did it work with the phone company? I thought competition is good. If Amazon wants to sell books and records thats fine. But they sell everything under the sun. I just think it might be something we should look at. I thought the free market was good. Competition is good.

What do you think?

edutcher said...

Don Surber reminds us Macy's tried to fight The Donald.

AJ Lynch said...

100 stores - that is a damn shame. A lot of people put out of work.

chickelit said...

Low priced McWalmarts with billionaire liberal CEOs to bankroll Clinton is what the country gets no matter what the country needs.

chickelit said...

I would trust Trump implicitly when it comes to assessing what American business needs, except for the sorts of businesses he's in. It's called conflict of interest. It's like if we elected bags President we'd have to watch his moves in high end stainless stuff.

chickelit said...

Passing through Sonaro Desert right now. Lots of saguaro cacti giving me the finger.

edutcher said...

chickelit said...

Low priced McWalmarts with billionaire liberal CEOs to bankroll Clinton is what the country gets no matter what the country needs.

Yeah, but how many will be around in 5 years? It really is an ability thing.

Sonaro or Sonora?

BTW You never said, what part of Comancheria you were in this morning.

Dad Bones said...

Trooper

I think that Amazon has been good for consumers and for the businesses whose products it sells. I don't know how closely it approaches the definition of free markets nor do I know how Trump's nationalism will affect free markets. Bezos pissed off Trump so his empire will probably be invaded if Mr Trump is elected and can do it. I might hope that it would benefit me, and maybe it will, but I'm not counting on it.

edutcher

Even if the govt seized all of Bezos' $50+ billion and wisely applied it to paying off the national debt (which it would never do) it's almost inconceivable to me that it would barely make a dent in it. Anyhow, if Bezos became a pauper there's a chance he might be living next to me and I don't really like the guy.

chickelit said...

@edutcher: Old Route 66 and nowadays I-40 runs right through old Comancheria. We drove I-40 and stayed in Tucumcari which has its own history.

Anyways, my son drove like a bat out of hell. Home now.

chickelit said...

From the wiki link: "Many of the scenes in the television show Rawhide (1959–1966) starring Clint Eastwood were shot in the Tucumcari area."

edutcher said...

I kind of had a feeling they went far afield to shoot "Rawhide", especially some of the early episodes. There are some episodes around some old Spanish missions that couldn't have been done along the Camino Real (too populated).

Sounds like a great, if hot, trip. Most people don't realize the Comanches impeded the settlement of West Texas and NE New Mexico to the point the railroad didn't even come though until the 1880s.

Sixty Grit said...

If Macy's closed all of their stores they would rich, rich I tells ya!

AJ Lynch said...

Sixty- Bingo! That seems to be what they want us to believe when they announce these types of restructurings with great fanfare.

Dust Bunny Queen said...

Well......closing stores that are costing you money and putting more into those locations that are profitable, or opening new stores in areas where the demographics are more favorable, will bring the stock price up as investors feel that the company is actively managing their business and not just drifting along.

Unfortunately, closing those anchor stores in malls will have a big negative effect on the rest of the stores. The company likely has leases that are finally expiring at those loser locations and now would be a good time to make some changes. Sadly, some people will lose their jobs. However, the company has to be smart to stay in business.

I haven't shopped at a Macys in years, even though there is one nearby (if you can count an 80 mile one way drive as nearby). The clothing wasn't my style. Looks cheaper than it did in the past and the other items....overpriced and yes, available on line.

Amazon is a dual edged sword. Bezos is a creep and I hate to be a part of making him rich. However, due to our remote location, lack of shopping opportunities and the great prices, we use Amazon....a lot! Hundreds of orders over the last couple of years. From things like trailer tires, bookcases to hair gel and toothpaste. Amazon Prime's free shipping is incredible. Locally I can't buy things that are the brands I like or the items are just not available at all. Amazon and on line shopping has been a miracle for us out in the fly over country. We just bought a replica/replacement steering column for our 72 chevy pick up from Brothers. Free shipping. Delivered in less than a week! The closest place to purchase such an item is at least a 5 hour drive away.

We even buy some parts that we have to get retail for our business on Amazon. (Our pumps and other larger items come from the distributor and as we are dealers, we get a substantial discount from the retail prices) It is the smart thing to do. For instance 1 1/4" brass ball valves sell for 28$ at the supply house. We can't mark those up because people know how much they cost. However on line we can buy them at 30 to 40% less and then mark them up to the retail cost. It doesn't sound like much but when you install a lot of small parts like this over the year it does contribute to the bottom line. Not only does it save us money on the items, we don't have to spend our TIME and Gasoline to drive to the supply house. Take a whole day out of the work schedule. Time IS money you know :-)