Macy to Close 8 Stores; 1,850 Jobs Affected : Retail: The owner of the Bullock’s and I. Magnin chains is eliminating its poor performers, including the Bullock’s store in La Habra’s Fashion Square.
In an attempt to stem its mounting losses, R. H. Macy & Co. said Wednesday that it will close seven poorly performing Macy’s department stores, most of them on the East Coast, and the Bullock’s in La Habra.
The closings, to be completed by Aug. 1, will result in the layoff or reassignment of 1,850 workers and change the face of some communities in which the stores are important retail assets. In La Habra, for example, Bullock’s is the only upscale department store, a major source of sales tax revenue and the employer of 150.
“Closing stores is always a painful process, but we believe these actions are necessary to ensure the ongoing viability of the organization for our 65,000 employees nationwide,” Mark S. Handler and Myron E. Ullman, Macy’s co-chairmen, said in a joint statement from the retailer’s New York headquarters.
“In light of Macy’s current position, it is imperative that the company concentrate its resources on its most productive stores with sound prospects for growth and profitability,” they said.
Macy’s filed in January for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code.
The closings will leave Macy’s with 112 stores in the Macy’s, Bullock’s, I. Magnin and lesser-known chains. The relatively small number of stores being closed, given the overall size of the company, is “testament to our confidence in the underlying strength of the Macy’s franchise,” the two executives said.
Analysts said Wednesday that they expect Macy’s, which lost $57 million in March, to continue to trim costs by closing stores.
“There are other stores that need to be looked at very closely (that are) not pulling their weight,” said Kurt Barnard, who publishes a retailing newsletter in New York.
Alan Millstein, publisher of the Fashion Network Report, an apparel industry monthly in New York, said, “They are trying to apply a tourniquet to the financial hemorrhage.” He noted that Macy’s earlier planned to closed five I. Magnin stores and about 50 specialty stores.
The locations designated Wednesday for closure are some of the weakest stores the company owns. They make up 6.6% of the company’s total stores but contributed only 2.6%, or $175 million, to overall revenue of $6.7 billion last year, the company reported.
They are the retailing pillars, however, of the cities they serve, in several cases anchoring aging downtown business centers. A doomed Macy’s in Newark, N.J., for instance, was opened in 1928.
Other stores scheduled for closure are Macy’s in Brooklyn and New Rochelle, N.Y.; Plainfield, N.J.; Hunt Valley, Md.; Avondale, Ga., and Columbia, S.C. The Macy’s store in San Rafael, Calif., will be limited to sales of home furnishings.
In La Habra, the Bullock’s store opened in 1968 as the major anchor for the city’s Fashion Square. The open-air mall was built at Imperial Highway and Beach Boulevard in anticipation that two freeways would be built nearby.
The freeways, however, were never built, and the mall was eventually torn down to make way for a discount center. Only the Bullock’s was left standing. The chain’s owners “said they wanted to stay and that it was a money-maker to them,” said Lee Risner, La Habra city manager.
The sales tax revenue that will be lost when the store closes will be equivalent to the annual salaries of three to four of the city’s police officers, he said.
“With the recession continuing, this is not the time you want to lose any retailer, much less a larger one,” Risner said.
At a Glance: Bullock’s Inc.
Corporate headquarters: Los Angeles
Parent company: R.H. Macy & Co.
Nature of business: Department-store company
Number of stores: 22 Bullock’s in Southern California, Nevada, Arizona
Number in Orange County: Four: Bullock’s and Bullock’s Men’s store, South Coast Plaza; and Bullock’s at Mission Viejo Mall and MainPlace/Santa Ana
Stores closing: Bullock’s in La Habra, as well as seven Macy’s locations in New York, New Jersey, South Carolina and Georgia
Stores opening: 10 Bullock’s or Macy’s across the country within three years, including two Bullock’s in Southern California--at Gateway Center, Burbank, in September, and at Moreno Valley in two years
La Habra Market Place
Opened: August, 1968
Selling space: 271,000 square feet
Closing date: August, 1992
Employees: 150 at the retail store: Corporate offices, the print shop and the fur storage, alterations and return-to-vendor departments will be relocated locally, along with the 80 employees working in those departments
Source: Kekst & Co. public relations