CINCINNATI -- Macy's announced Wednesday it will lay off 2,500 workers and shut five underperforming stores as it restructures the business.
The changes will lead to a "very small" number of layoffs in the Cincinnati area, where Macy's employs 4,700 people, said Macy's spokesman Jim Sluzewski.
"Some new positions are being added as we adjust the organization," he added. "We expect the actions announced will result in a small net gain of positions in Cincinnati,"
The announcement comes on the heels of a strong holiday shopping season for the department store chain.
Macy's reported holiday same-store sales in November and December rose 3.6 percent and were up 4.3 percent when factoring in departments licensed to third parties.
The company is optimistic about this year. It expects earnings per share of $4.40 to $4.50 in 2014, besting analysts' prediction of $4.36 per share, according to FactSet.
"Our company has significantly increased sales and profitability over the past four years, and we have created a culture of growth at Macy's Inc.," said Terry J. Lundgren, Macy's chairman, president and CEO in a statement. "As the success of these strategies has unfolded, we have identified some specific areas where we can improve our efficiency without compromising our effectiveness in serving the evolving needs of our customers."
Macy's has been a standout among its peers throughout the economic recovery and has reaped the benefits of its strategy of tailoring merchandise to local markets. But like other merchants, Macy's is grappling with a still cautious shopper. It's also trying to respond to shoppers' shift toward buying and research on their PCs and mobile devices like smart phones.
While Macy's will cut jobs, it is also planning to reassign or transfer some workers. It's also adding positions related to online shopping, a growing area for the company, and warehouses. That will leave its workforce level at about 175,000.
The Cincinnati-based company plans to close five stores and open eight others, leaving it with 844 stores nationwide once the changes are complete.
It's also shifting merchandising responsibilities for "soft home categories" like sheets and towels from the district level to the regional and national level. Macy's says that such goods change less often than clothing and accessories and are less subject to local tastes.
Stores to be closed are:
- Fiesta Mall, Mesa, AZ (159,000 square feet; opened in 1979; 98 associates);
- Metcalf South Shopping Center, Overland Park, KS (216,000 square feet; opened in 1967; 88 associates);
- Jamestown Mall, Florissant, MO (200,000 square feet; opened in 1994; 88 associates);
- Medley Centre, Irondequoit, NY (129,000 square feet; opened in 1990; 96 associates);
- Fashion Place Mall, Murray, UT (26,000 square feet; opened in 1988; 42 associates).
Macy's says the moves will save it $100 million per year and forecast a 2014 profit above Wall Street's forecasts.
The news sent its shares up 5.5 percent in after-hours trading.
The Associated Press contributed to this report
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