Macy's Troubles Continue - Impact on Liquidation Inventory Uncertain
01/08/2017
Macy's comparable store sales fell 2.1% in November and December, according to its latest earnings release. The company said it will be closing 68 stores. These closings are part of the previously announced 100 stores closings. With some additional restructuring, the total impact on employees will be a reduction of more than 10,000 jobs. The move is expected to save the company $550 million per year.
There is a decent chance that the store reductions will create a short term bump in liquidation volume, but that is not certain. The company may move inventory to other nearby stores or sell it onsite in closing sales.
Longer term, the continued reduction in revenue will mean a reduction in returned inventory. Customers can't return what they don't buy. We will see how things develop, but if they are not able to successfully drive the shift to online fast enough to make up for shrinking revenue in stores, the company will be in for additional pain--store closures and job losses.