EARNINGS : Macy’s Loses $225.9 Million in 3rd Quarter

R. H. Macy & Co. reported a $225.9-million third-quarter loss Tuesday, a reflection of disruptions associated with the famous retailer’s recent Chapter 11 petition for financial reorganization and the weak economic conditions in California and the Northeast.

Macy’s, which filed for bankruptcy protection Jan. 27, said it had net sales of $1.305 billion for the quarter ended May 2--a decrease of 5.8% from the $1.385 billion reported in the same period of fiscal 1991.

The loss stems partly from charges of $75 million for interest expenses and $91 million for reorganization expenses. The reorganization expenses included $85 million in estimated costs associated with the closing of poorly performing stores. The company plans to close seven Macy’s stores and a Bullock’s store in La Habra on Aug. 1.

The company is also closing 52 specialty stores and has already closed five I. Magnin stores, including three in California. The I. Magnin stores in Palm Springs, Sacramento and Santa Clara were closed in late May. California and states in the Northeast are Macy’s biggest markets.

Uncertainty immediately after the bankruptcy court filing, relating to Macy’s plans for store closings and restructuring, accounted for much of the sales slump, said Michael Freitag, a Macy’s spokesman.

“There was a shortage of some merchandise because some vendors stopped shipping until the situation was clarified,” he said.

The size of the third-quarter loss did not surprise analysts. They had expected a weak third quarter, although they also expected Macy’s to improve on its $671.6-million second-quarter loss.

“This is not surprising, partly because the past quarter has not traditionally been a strong sales period for retailers,” said Tom Razukas, an analyst at New York-based Fitch Investors. “But Macy’s needs to begin to turn things around soon.”

“We haven’t seen a turnaround at Macy’s,” said Michael Cha, an analyst at J. P. Morgan Securities Co. in New York, “but the company has made efforts to prevent further deterioration.”

Cha said Macy’s had bolstered its management by hiring Thomas Shull as senior vice president for corporate planning--a new position--and by bringing in Burnett Donoho as vice chairman in charge of the 68 stores in the retailer’s eastern region. Macy’s announced the appointments Monday.

Donoho is former president and chief operating officer of Marshall Field’s department stores. Shull is president and co-founder of Meridian Strategies, a venture management and consulting firm based in Los Angeles.