Macy’s Inc. (NYSE: M), the deeply troubled department store chain, says it will add 80,000 workers for the holidays. Most will be in distribution and warehouse operations as the company prepares the logistics for e-commerce sales and what Macy’s management hopes will be a busy fourth quarter. However, that hope may be misplaced.
Macy’s pegged the total number of people it would hire to support online business at 18,000. This is ambitious and assumes that Macy’s e-commerce business will be a success during the holiday period. The company’s overall sales indicate this will be a struggle. In the first half of the year, Macy’s total revenue was $10.9 billion, down from $11.6 billion in the first half of 2016.
Management must assume that as it has shuttered stores its potential customers will go online. Macy’s brand may not be that strong, especially in a world in which e-commerce has become more and more crowded. It has become a lifeboat for traditional retailers who need to challenge Amazon. However, it is a lifeboat that is filled to overflowing.
Target Corp. (NYSE: TGT) recently announced that it will add 100,000 people for the holidays. It was the first in what will be a long line of temporary job announcements made by America’s largest retailers. Each announcement will be founded on the odds that holiday sales will bring the revenue bump that all retailers need in the fourth quarter, when most make the majority or all of their profits.
In Macy’s case, it cannot afford the October through December shopping period to be weak. Its downward spiral is already accelerating. So far, closing stores has been its only obvious strategy. It is also among the large retailers saying that online sales are their future. Hiring people will not make it so.
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