R. H. Macy & Co. Inc. reported a $671.6-million second-quarter loss Tuesday, reflecting the famous retailer's dismal Christmas and the disruptive uncertainty that helped push it into bankruptcy court.
The privately held department store company said sales in the quarter ending Feb. 1 fell 6.4% to $2.05 billion from $2.2 billion in the same period a year earlier.
That left debt-burdened Macy's without enough money to pay suppliers. The company, still trying to pay down the costs of its 1986 leveraged buyout, was forced on Jan. 27 to file for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code.
In a quarterly filing with the Securities and Exchange Commission, Macy's attributed the slide in sales to the weak economy, particularly the sluggish consumer spending in California and the Northeast, its biggest markets.
Macy's said sales were also affected by a disruption in merchandise shipments around the time of its Chapter 11 filing. Vendors, afraid they would not be paid, held back merchandise until the bankruptcy court filing, which guaranteed payment on new shipments.
Separately, Macy's confirmed that it will be laying off about 200 sales, administrative and executive employees at its 52 Macy's and Bullocks in the western United States. The company has already started to lay off a similar number of workers in its East Coast stores.
In addition, Macy's has said that it expects to cut about 800 workers when it completes the closure of five I. Magnin and 52 specialty stores announced earlier this month. A spokesman for the company said it expects to announce additional store closings and staff cuts as it proceeds with its bankruptcy reorganization. Macy's employs 68,000 workers.