[1/6/17] US department stores Macy’s and Sears announced thousands of layoffs and hundreds of store closures on Wednesday following dismal holiday sales and declining yearly revenues.
Macy’s said that it will eliminate more than 10,000 jobs and will move forward with the planned closure of 68 stores by the middle of this year. The closures are part of 100 announced in August, representing a loss of nearly 14 percent of the 730 stores operated by Macy’s in the US and its territories.
The company reported that it will seek to maintain profits by eliminating a number of management positions across the company, cutting 6,200 people from the workforce. On top of this, 3,900 Macy’s store employees will lose their jobs, though the company indicated that some could be reassigned to other stores.
Macy’s reported that its sales during the holiday months of November and December had fallen 2.1 percent from the previous year. Retailers rely on sales at the end of the year to pad out revenue and profits.
Sears Holdings also announced on Wednesday that it was planning to shutter 150 stores by April; 108 of its Kmart locations and 42 Sears stores. The closures represent 13.5 percent of the 801 Kmart locations remaining at the end of 2016 and 6 percent of the 676 remaining Sears locations.
Holiday sales at Kmart and Sears stores in November and December were down by between 12 and 13 percent from 2015.
On top of the layoffs and closings, Sears announced that it was raising funds to prop up its operations by selling its Craftsman tool brand to Stanley Black and Decker for $900 million. Even before the onset of the 2008 economic crisis Kmart and Sears had begun to hemorrhage thousands of jobs and close hundreds of locations.
Sears Holdings was created in 2005 after Kmart emerged from bankruptcy and merged with the floundering Sears, Roebuck & Co. for $11 billion. Despite the efforts to salvage both companies, Sears has seen its total sales cut in half since 2007.
Other major US retailers, including Kohls, L Brands and American Eagle, also announced declining holiday sales but have yet to announce any layoffs or store closures. Kohls closed 18 stores and laid off more than 1,500 employees in 2016.
The closings and layoffs are an indication of the actual state of the economy, more than seven years after the beginning of the supposed economic “recovery.” The large traditional retailers have also come under immense pressure the growth in sales through online retailers such as Amazon over the last decade.
As American workers have seen their wages either stagnate or decline, they have increasingly turned to online retailers that offer goods at lower prices than the department stores and also offer the convenience of home shipping.