US department store chain Macy’s is to close about 100 stores and increase investment in its online business after 18 months of sliding sales.
Total sales fell 4% to $5.87bn in the second quarter after falling 7.4% in the first three months of the year.
As in the UK, department stores in the US have been struggling with tough competition from online retailers and discount stores.
Macy’s currently operates 728 stores in the US.
A strong dollar has reduced tourist spending in the United States and poor weather conditions have also weighed on sales, Macy’s said.
The company, which also operates the upmarket Bloomingdale’s stores, said it would focus investment in stores that offer the highest growth potential.
Sales in stores open at least a year, including sales in departments licensed to third parties, fell 2% in the latest quarter, though the drop was not as big as analysts had expected.
Although sales were slower, results were better than expected, with profit and revenue, mirroring the strong performance of smaller rival Kohl’s Corp and lifting stocks across the sector.
Shares in Macy’s jumped by nearly 17% at the start of trade on Wall Street, before trimming gains slightly.
“We operate in a fast-changing world, and our company is moving forward decisively to build further on Macy’s heritage,” said Macy’s chief executive Terry Lundgren.
Macy’s said it would look to build on the rapid growth of its online sales.
“To foster continuation of this growth, the company is investing in capacity-building on its sites and apps, improvement in natural language search, faster page loading and simpler procedures for placing and fulfilling orders,” the company said in a statement.
[Source:- BBC]
