Macy’s Denies Bullock’s Faces Mass Layoffs
The chairman of R. H. Macy & Co. took issue Monday with reports about imminent layoffs at Bullock’s, saying stories in The Times and other publications had “created unnecessary anxiety” among the department store chain’s workers.
While maintaining that “it’s inappropriate for us to talk about a company we don’t own yet,” Edward S. Finkelstein called The Times to complain that reports of anticipated widespread cutbacks at the store’s Los Angeles headquarters once Macy’s assumes control were “irresponsible.”
“There’s no way that most of the employees will be laid off,” he said. “There are going to be a lot of duties shifted, (but) we have every intention of having a local merchandising staff on board.”
When asked how many of the approximately 1,000 headquarters employees would receive pink slips, Finkelstein said: “Less than 20% will be laid off. In our opinion, that’s a large number of people. We worry about it, but it’s not 1,000 or 800 or 600.”
For days, reports have circulated throughout the retail and apparel industries that many Bullock’s workers will face dismissal once the store’s merchandising and administrative duties shift to Macy’s Atlanta division. That switch is part of an internal reshuffling ordered by the New York-based merchant, which is expected to take control of Bullock’s, Bullocks Wilshire and I. Magnin in about a week.
Macy’s won the right to buy the three chains for $1.1 billion in a deal with Toronto developer Campeau Corp., which surrendered them in exchange for Macy’s agreement to drop out of the bidding for their parent company, Federated Department Stores.
At an emotional meeting at Bullock’s headquarters Friday, Chairman James E. Gray and President Frank Doroff confirmed to employees that they would not be continuing in their positions after the change of control. They also indicated that Bullocks Wilshire President Terry Lundgren would not be staying on.
Some employees who attended the meeting said they were left with the impression that widespread layoffs were in the offing. Many said that, even if transfers were offered, a number of employees might not be inclined to leave Southern California for Atlanta.
Finkelstein responded vociferously Monday, saying that all three of the chains’ top executives had been offered what he termed “important positions” with Macy’s.
“It’s clear that Mr. Gray never revealed the fact that he was offered an important position at Macy’s,” he said. “He was offered the presidency of Macy’s California, a business approximately twice the size of Bullock’s.”
Turned Down Presidency
Finkelstein also said Gray “has not yet turned us down.” Gray could not be reached for comment Monday.
Doroff, he added, was offered but turned down the presidency of Bullock’s, a role in which he would have reported to the Atlanta executives. Of that, Finkelstein said, “We understand why he didn’t choose it, but we did offer it.” Doroff declined to comment Monday.
Finkelstein defended Macy’s decision to install a new overseeing team for Bullock’s. “First of all, the future direction of the business, one could assume, would come from the current management, not the old management.”
Finkelstein and other Macy’s executives, including President Mark S. Handler, are expected to be in Los Angeles beginning Wednesday for several days of talks with Bullock’s employees.
“Everybody we’ve met in the stores we have been very impressed with,” he said, adding that he and a Macy’s entourage had recently toured six stores. “We think the morale is terrific. All those people have a great career with us.”
As for headquarters executives, he said: “There will be a substantial number, of course, that won’t stay on. We will offer chances with Atlanta or Macy’s California (in San Francisco). (For the others,) we will do counseling and help and be as fair and generous as we can.
Finkelstein noted Monday that some workers are losing jobs in the consolidation of Macy’s New York and New Jersey, word of which came out in connection with the changes affecting Bullock’s.
“That had nothing to do with acquiring Bullock’s,” he said. “We decided a long time ago that for economic and strength reasons, we would amalgamate New York and New Jersey. “That will make us a more efficient organization. The way an organization responds to those losses reflects on the quality of management.
“I don’t care for the assumption that we didn’t respect the organization (Bullock’s) and that we’d be stupid enough to destroy it,” he added. “Somebody ought to give us a little credit. (After all,) we bought the organization (and) we have reasonably good judgment in trying to run a business.”
