NEW YORK — Federated Department Stores Inc. said Friday it will close five underperforming Rich’s-Macy’s and Lazarus-Macy’s stores by May, affecting 369 employees.
This story first appeared in the January 20, 2004 issue of WWD. Subscribe Today.
The stores, which include the Lazarus-Macy’s store in downtown Pittsburgh and units in Oxford and Westerville, Ohio, along with Rich’s-Macy’s doors in Birmingham, Ala., and Smyrna, Ga., will lead to an expected annual reduction in sales of about $35 million, Federated said, but will have no material effect on ongoing earnings.
The Cincinnati-based operator of the Macy’s and Bloomingdale’s nameplates, among others, also reaffirmed its intention to close the Lazarus-Macy’s store in Heath, Ohio, in April.
The closures — which also include the previously disclosed Lazarus-Macy’s department store in downtown Columbus, Ohio, set to close in August — represent the latest move by Federated to streamline and improve efficiency in those divisional store bases.
“The decision to close a store always is difficult because we recognize the impact it has on our employees and the local community,” said Ronald Klein, chairman of Federated’s Rich’s/Lazarus/Goldsmith’s-Macy’s division, in a statement. “While as a business we cannot continue to operate underperforming store locations, we are committed to acting responsibly in all such cases. This means ensuring that our employees are offered enhanced transitioning assistance, and that our outstanding commitments to United Way and others are fully honored in each of the communities affected by our decisions.”
Taken together, the costs for store closings and consolidation should accrue to approximately $15 million, Federated said, of which an estimated $7 million will be charged in the fourth quarter of 2003. Of that, approximately $5 million will be a non-cash charge. Remaining charges mostly will be booked in 2004. The one-time costs are not expected to change the company’s fourth-quarter earnings guidance of $2.15 to $2.20 a share.