MACY’S MASSACRE
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Warning that this year’s profits will sorely miss Wall Street’s estimates, Macy’s said it will lay off 7,000 workers and slash its dividend.
Confirming an exclusive Saturday report in The Post, the debt-ridden department store said yesterday it will consolidate its regional operating divisions and cut staff as it struggles to conserve cash amid a dismal shopping environment.
Macy’s – which expects the bulk of the layoffs to be done by May 1 – is the latest big chain to fire workers amid slack consumer spending. Last week, Home Depot announced it was cutting 7,000 jobs. Saks, Neiman Marcus and Lord & Taylor also recently have culled their ranks.
However, Macy’s said it expects its workforce in New York to “increase nominally” as it further centralizes its business around the company’s offices here. Macy’s is eliminating divisions that had focused on the East and West Coasts, the Midwest and South and Florida, respectively.
At the same time, the company is preparing a nationwide rollout of “My Macy’s” – a year-old initiative to better tailor merchandise to local tastes. The company will coordinate much of the program from its New York offices.
While Macy’s expects the 4 percent reduction in its workforce to save $250 million in 2009, the retailer admitted its profits could plunge as much as 67 percent this year, to between 40 cents and 55 cents a share.
That forecast assumes that same-store sales will drop between 6 percent and 8 percent on top of last year’s 4.6 percent decline.
Macy’s also slashed its quarterly dividend 62 percent, to just 5 cents a share, as it struggles to shore up its dwindling cash reserves.
In a bid to ease fears about its liquidity, Macy’s announced a tender for $950 million in debt that’s coming due beginning in April. Still, Moody’s Investors Service said it’s reviewing Macy’s debt for a possible downgrade, citing the lowered outlook.
Macy’s shares fell 36 cents, or 4 percent, to close at $8.59.