'The Retail Doctor' says Macy's restructuring plan is not bold enough
- Macy's on Tuesday announced it is cutting 100 management jobs as part of a restructuring plan.
- The restructuring plan "doesn't seem bold enough" to help boost customer demand, "The Retail Doctor" said.
- Department stores like Macy's should focus on building connections with customers especially under the impact of e-commerce, he says.
- Watch Macy's trade live.
Macy's restructuring plan doesn't go far enough to help boost its business, "The Retail Doctor" says.
The department-store chain on Tuesday announced a restructuring plan aimed at reducing costs and speeding up decision making. As part of the move, it is cutting 100 management jobs. Macy's expecting the restructuring to generate annual expense savings of $100 million starting in fiscal 2019."The steps we are announcing to further streamline our management structure will allow us to move faster, reduce costs and be more responsive to changing customer expectation," Macy's CEO Jeff Gennette said in a press release.
But Bob Phibbs, CEO of New York-based consultancy "The Retail Doctor," says cutting the number of management jobs doesn't touch the pain point of Macy's lower customer demand.
"It doesn't seem bold enough," Phibbs told Business Insider. "They still struggle a bit to understand who their shoppers are and how to reach them."
Macy's operates its business as a warehouse and expects its merchandise to sell itself, Phibbs said. "It's not a good strategy. It lacks connections with customers," he added.
This year looks like it's going to be a tough one for US department stores. Macy's, JCPenney, Kohl's, and Nordstrom are closing more than a dozen stores collectively this year.
While e-commerce sites such as Amazon add headwinds for brick-and-mortar stores, physical shops still have plenty of market opportunities as long as they focus on going after customers, according to Phibbs.Younger generations seem to be moving away from online shopping, he said. "Millennials want to go back to stores because they want people to help them."
- Macy's beats and announces a restructuring plan (M)Macy's is getting clobbered after slashing guidance due to a disappointing holiday season (M)
- Retailers are getting slammed after reporting holiday sales. Here's why