DH SEES BENEFITS IN CUTBACKS
NEW YORK — Dayton Hudson Corp. said Wednesday that last week’s cutback of 7.2 percent of the corporate staff at its department store arm is not only a cost-cutting effort in the face of weak profits but will allow the company to respond more quickly to consumer tastes.
The Minneapolis-based retailer laid off 180 of its 2,500 corporate workers at the department store unit’s headquarters, from middle management to administrative workers. The division employs a total of 41,000 people.
“There will be fewer senior-level buyers and divisional merchandise managers in women’s as well as in other areas [taking on broader duties],” a spokeswoman for the department store division said Wednesday.
One senior buyer, for instance, is responsible for handbags, taking over duties once split among several staffers.
“We think this will empower buyers to respond more effectively to our customers, by giving a single buyer a better feel for a whole category,” the spokeswoman said.
DH acknowledged the layoffs were a response to weaker-than-anticipated profits at the unit, which includes Marshall Field’s, Dayton’s and Hudson’s. Over the past year, the firm has sought to prop up the performance of its department stores while turning around its moderate-priced Mervyn’s chain.
Dayton Hudson said the department store layoffs would take the cost-cutting initiative at those stores “significantly” beyond the $20 million in expense reductions notched earlier this year.
The company said the deeper cuts would keep the unit’s operating profit for 1996 even with last year’s, at $184 million. Analysts, however, noted the retailer will need to step up sales growth at the department stores if they are to thrive over the long run.
Dayton Hudson itself has scaled back expectations of a business pickup. Officials said new merchandising efforts now are projected to lift sales next year, rather than in this year’s second half, as earlier estimated.