With Americans doing more of their shopping online than ever before, department stores are taking a hit. Now, one major American department store is closing its doors, and more than 10,000 people are feeling the pain as they’ve just been notified of their impending termination.
Macy’s announced on Wednesday the closure of 68 of the company’s 730 stores, which will officially shut their doors by the middle of this year. It is a move that analysts are calling “harsh, but necessary.” The announcement follows a sharp decline in sales over the holidays.
The closure of Macy’s locations from Florida to Oregon means a total of 10,100 jobs will be cut, including “layers of management” in central operations, according to USA Today. Some of these employees could be transferred to other locations, but most will be forced to find other work.
“We continue to experience declining traffic in our stores where the majority of our business is still transacted,” said Macy’s CEO Terry Lindgren. He added, “We are closing locations that are unproductive or are no longer robust shopping destinations due to changes in the local retail shopping landscape. … These are never easy decisions.”
Though the news did not seem to soothe investors, with Macy’s shares plunging 8.7% to $32.70, Neil Saunders, an analyst for Conlumino, a firm that follows the retail industry, insisted it was the right move. “In stores where they think they have potential, they will invest more,” he said. “That is the right direction. They want to make sure the ones they have are really great stores and that requires money.”
Saunders added that he doesn’t think “this is the end of” all closures the retail industry will eventually see from Macy’s as buyers shift to making more of their purchases over the internet. The retailer is not alone; Sears and Kmart have also announced the closure of multiple physical locations.
This news comes at a time when President-elect Donald Trump is working hard to keep jobs in America and has announced that the two rules his administration will follow are: Buy American & Hire American. If anyone can save our declining economy, it’s the billionaire businessman who turned the political scene on its head this election season.