The closure of the Minneapolis operation will result in about 2,250 job losses and continues Macy’s push to unwind the regional structure that it inherited when it bought May Department Stores – Marshall Field’s former owner – three years ago.
The retailer will also merge seven of its other regional headquarters into four and set up smaller regional offices to localise its offer in different areas in a move it has named “My Macy’s”.
Chairman Terry Lundgren said that, as well as reducing costs, the move would engage customers more effectively. “We plan to drive sales growth by improving our knowledge at a local level and then acting quickly on that knowledge,” he said.
Last week, Macy’s reported that sales plunged 7.1 per cent in January, as slowing customer demand in the US took its toll.
The group has struggled to assert itself as a national department store brand, because customers have been slow to warm to converted stores. Macy’s bought May Department Stores for US$11 billion (£5.64 billion) and converted all its sites to Macy’s last year.
“Ultimately we’ll be judged on our performance in each store. It’s wonderful to have these marketing opportunities with a national brand, but we have to be locally relevant,” said Lundgren.
MHE Retail chairman Edward Whitefield said that the move is a culmination of 15 years of consolidation for US department stores. “Macy’s and Marshall Field are very similar, so there is no need for them to have two headquarters,” he explained.
“Usually, head office administration costs count for about 10 per cent of sales, so for a company that turns over billions of dollars a year, it is a significant saving. This will enable it to generate more profit and invest in the business in the future,” said Whitefield.