Macy's Begins The Year By Trimming Down

Americans weren't the only ones who began the New Year with a resolution to trim down. Macy's Inc. M similarly began 2016 with plans to become leaner after disappointing holiday sales reaffirmed worries about the firm's bottom line. Existing store sales were down 4.7 percent in November and December, and the company says it expects to see continued decline through January. In order to cope with lower sales, the company is planning to cut 4,800 jobs and close 40 stores. What Happened? Macy's is one of the first retailers to release holiday sales data, and the firm isn't likely to be the only one that suffered from a poor shopping season. E-commerce firms like Amazon.com Inc. AMZN have been eating away at big box department stores' clientele for years and 2015 was no exception. More and more shoppers opted to order their Christmas gifts from the comfort of their own homes, and retailers like Macy's haven't been able to produce the same hassle-free online experience as their more seasoned competitors. Is There A Future? While Macy's announcement suggests that the company is in trouble, some say now could be a good time to buy. Macy's is reducing its store footprint and will likely have to navigate troubled waters in the coming year, however, once the company focuses on targeting profitable markets and improves its online shopping experience, it may see a marked comeback. Not Just Macy's Macy's isn't the only retailer undergoing such changes. Other companies like Wal-Mart Stores, WMT Target, TGT and Best Buy BBY have also been struggling to compete against online retailers, but are working to reform their operations, cut down on overhead and increase margins. Now may not be a booming time for brick and mortar stores, but it could be a great opportunity for investors looking to buy in cheap and profit from their rebound.