This post is also available in: Español (Spanish)
SOUTH PLAINFIELD, NJ—The Macy’s on Hadley Road located in Middlesex Mall will close for good early this spring, according to a recent news release.
A final clearance sale will begin on January 11, and run for between eight to twelve weeks, says the retailer.
Department store chain Macy’s Inc. will close more than 5% of its US stores this spring and cut many jobs, following a 5.2 % decrease in same-store sales during the holiday shopping period.
The warm weather has created larger than usual amounts of unsold inventory of mostly cold-weather goods such as coats, sweaters, boots, hats and gloves, according to the company. Moreover, sales have been hurt given "lower spending by international tourists as the value of the dollar remained strong," says Chief Executive Terry Lundgren.
“In light of our disappointing 2015 sales and earnings performance, we are making adjustments to become more efficient and productive in our operations," Lundgren said in the release.
The retail environment is facing unprecedented change. Thanks to the internet, consumers now have a myriad of options for shopping and do not depend as much on retail outlets like department stores.
“In today’s rapidly evolving retail environment, it is essential that we maintain a portfolio of the right stores in the right places," said Lundgren. "So we will continue to add stores selectively while also being disciplined about closing stores that are unproductive or no longer robust shopping destinations because of changes in the local retail shopping landscape."
Macy's, like many other large retailers, has been investing heavily in its e-commerce platform to both stay relevant and offer consumers the so-called "seamless" shopping experience.
“We can operate more effectively with an organization that is flatter and more agile so we can pursue growth and regain market share in our core Macy’s and Bloomingdale’s omnichannel businesses faster and with more intensity,” Lundgren said. "We will continue to invest in strategic initiatives that anticipate emerging customer needs."
The South Plainfield store is only 81,000 square feet and employs only 69 associates, below the 150 that work at the average Macy’s store.
The company says that it's “committed to treating associates affected by store closings with respect and openness.”
The associates may be offered positions in other nearby Macy’s “where possible.” It also says full-time and part-time associates who are laid off due to the store closings will be offered severance benefits, if eligible.
But a beauty consultant who said she’s been working at the South Plainfield store for the past eight years, said she doesn’t feel “real good” about losing her job.
Asked if her fellow employees were disappointed, she told New Brunswick Today: “Of course they are – we are all going to be unemployed.”
“I have to go apply for a job just like you would," she said. "I have no greater chance than you.”
She told NBT that the retailer wasn’t offering anything to associates.
“We are going to get severance packages but I would think it’s only the managers that are going to get offered positions, not us.”
But “on the plus side,” she explained that other retailers such as Lord and Taylor and Sephoria Beauty-Retail have visited and expressed interest in “certain people” who work in the store’s specialty departments.
“I did have someone from Sephoria come in and tell me to go there for an interview – so people are reaching out to us,” she said.
The Middlesex Mall appears to be undergoing a lot of change.
About six months ago the Walgreens closed its doors for good, and the neighboring Radio Shack, which fell victim to the electronic retailer's bankruptcy closed as well. In addition, the MJM Designer Shoes location in Middlesex Mall is said to be closing.
Walgreens recently decided to purchase Rite-Aid, but the combined company might actually have too many stores for the deal to be approved by regulators.
The South Plainfield Macy’s is known to take in an above average amount of returns, possibly due to having only one floor, unlike the Macy’s stores in Edison (Menlo Park Mall) or Woodbridge (Woodbridge Center Mall).
“You know what happens at this store? People shop at Menlo, Woodbridge, Bridgewater and all over, and they bring [merchandise] back here.”
“So we are not making – we are taking in,” an associate told NBT.
“When someone I know heard the store was closing she said: ‘Oh my god that’s where I used to go for all of my returns,’” said the associate.
“That’s why we are out of a job,” she added.
A 93,000 square foot Macy’s located in West Orange, which opened in 1975 and had 101 associates, was converted to a “Macy’s Backstage” store at the end of last year instead of closing permanently.
Macy’s Backstage represents the companies foray into off-price retailing. While Macy’s opened its first Backstage stores in New York, the West Orange store remains the only "Backstage" in NJ at this time.
“It is exhilarating to create an exciting and entertaining destination for the customer who loves to shop, and loves a bargain even more," said Vanessa LeFebvre, VP/general merchandise manager of Macy's Backstage stores this past Fall.
But Macy's said it doesn't expect "sales trend" to pick up in January.
"The wider truth is that Macy’s remains a business that is somewhat out of kilter with what modern consumers want," said Neil Saunders, CEO of a retail research agency and consulting firm called Conlumino.
"[Price] ranges, store locations, and its general store environment are simply not optimized to deliver; and in an era when consumer spending remains constrained, Macy’s is increasingly losing out."