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Retail

Macy’s Hammered Hard

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By Douglas A. McIntyre Published
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Macy’s Hammered Hard

© LindaJoHeilman / iStock Editorial via Getty Images

For a while, it looked like the brick-and-mortar part of the retail industry would make a comeback after e-commerce giant Amazon hammered it for years. The brutal disappearance of companies like JCPenney, Kmart and Sears was over. Not so fast. Macy’s Inc. (NYSE: M | M Price Prediction) has announced large layoffs and several store closures. Management must see a storm coming, or perhaps the storm has already arrived.

Macy’s and AI

AndreyPopov / iStock via Getty Images
Macy’s will fire 2,350 people, many of them in corporate operations. That is nearly 4% of staff. Five stores will close. Part of the trigger may have been the ability to automate some jobs. Retailer workers have been concerned about this for years, and retail management has hoped artificial intelligence (AI) would allow them to cut costs. If AI is a cause, investors have something to cheer about. Retail is often described as one of the first industries that would benefit substantially from the improvements in AI software. Macy’s also said it would export some jobs, which might be a savings if workers overseas are paid less than their U.S. counterparts. (These 20 jobs are vulnerable to automation and AI takeover.)

What’s Next for Macy’s?

Mario Tama / Getty Images News via Getty Images
Macy’s stock trades just shy of $18 a share. A fairly good quarter announced in early December took the stock to $21. However, the stock traded for $25 last February. Its recent peak was $35 in November 2021.

Macy’s continues to try to find a place in the wider retail world. It is up against Nordstrom, Target, Gap, Kohl’s and even Gap in the clothes department. Walmart and Amazon continue to take the lion’s share of the entire industry in the United States. Macy’s has about 500 stores. Walmart has about 4,600. Amazon makes sales on every smartphone and computer.

Macy’s management has not developed a strategic plan that allows Wall Street to think it has a bright future.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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