Desperate to please Wall Street as its business tanks, Macy’s is poised to cut costs by further centralizing its operations, sources told The Post.
The giant department-store chain is expected to announce next week that it’s consolidating its regional operating divisions, sources said, and could lay off hundreds, and possibly thousands, of workers.
A year ago, Macy’s pared its regional divisions to four from seven, firing 2,550 workers in the process. The remaining four divisions – which cover the East Coast, West Coast, Midwest and South, and Florida, respectively – may be collapsed into two that cover East and West, sources said.
However, some insiders close to Macy’s bet CEO Terry Lundgren will do away with the company’s regional structure altogether. That would give Macy’s a centralized business model like its competitors.
The Bloomingdale’s chain, also owned by Macy’s, isn’t part of the consolidation effort, sources said.
“Macy’s divisions are like martinis,” one top industry executive told The Post. “Four is too many. Two makes you feel good. But one is probably the best idea.”
The moves are a sharp about-face for Lundgren. When Macy’s bought May Co. in 2005, Lundgren said the resulting nationwide hodge-podge of regional offices was “what separates us from most of our competition.”
But looking to eliminate overlapping departments, Lundgren has since created a new program called “My Macy’s,” run out of the New York offices, to keep better tabs on local customer tastes.
Sources say a complete centralization could be tricky because the East and West divisions are different, with separate merchants and distribution networks. While Macy’s West is seen as more upscale and fashion-savvy, Macy’s East is the company’s largest and most profitable division.
That’s partly because the latter is based in New York, with offices just steps away from the company’s major suppliers.
“If you don’t give them enough money for markdowns, they show up at your door and beat it out of you,” one apparel executive joked.