Macy's to Close Five Stores After Lowering Guidance
Macy's (NYSE: M) has announced that it will close five stores and one Bloomingdale's location after lowering its Q4 guidance.
The company had previously expected to report a fourth-quarter EPS of $1.94 to $1.99. Macy's now believes that it will announce an EPS of $1.91 to $1.96, while analysts were anticipating an EPS of $1.98.
Macy's will begin its final clearance sales for five stores -- including a massive location in downtown Houston, Texas -- on Monday, January 7. The Houston location opened in 1947, employs 138 associates and features 791,000 square feet of store space.
Other store closures will occur in Pasadena, California (opened in 1980 and employs 116 associates); Belmont, Massachusetts (opened in 1978 and employs 101 associates); downtown Honolulu, Hawaii (opened in 1850 and employs 91 associates); and downtown St. Paul, Minnesota (opened in 1963 and employs 153 associates).
This is not the first round of store closures that Macy's has experienced. In fact, it has become somewhat of a tradition for the company to announce its annual closures at the start of each year.
In January 2009, Macy's announced that it would shut down 11 underperforming stores ranging from Tennessee to Hawaii. The company closed an additional five locations in January 2010, followed by the closure of another five locations in January 2012.
Macy's also closed several Bloomingdale's locations. This year's closure will occur in Las Vegas, Nevada.
In a company release, the upscale retailer said that it is "committed to treating associates affected by store closings with respect and openness." Associates that are displaced by store closures "may" be offered positions at nearby Macy's locations, while "eligible" full-time and part-time associates will be offered severance benefits.
Macy's will also hire several hundred new employees when it opens five additional stores over the next 24 months. Those stores will be located in Victorville, California; Gurnee, Illinois; Bronx, New York; Sarasota, Florida; and Las Vegas, Nevada.
Macy's is trading down less than one percent Thursday morning. The company rose nearly 20 percent in 2012.
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