Shares in Macy’s Inc (NYSE:M) slumped on Thursday morning after the renowned department store group announced it is to shut 68 stores and cut more than 1,000 jobs.
The announcement followed an inauspicious earnings report which revealed comparable store sales fell by 2.1% in the last quarter.
The news sent shares spiralling by more than 10% in pre-market trading to US$32.15.
A handful of stores have already closed down, with a further 63 to cease trading by the middle of this year which will leave it with a portfolio of around 660 shops.
The closings are part of the 100 stores Macy’s said it would be axing last summer.
Macy’s – which also owns the luxury department store, Bloomingdales – said the job cuts will help the company to streamline its business.
The expected savings from these actions will be pumped into the firm’s digital business, as well as marketing efforts including Bluemercury, Macy’s Backstage and China.
Fellow department store Kohl’s Corporation (NYSE:KSS) also told investors that it had struggled over the holiday season and subsequently lowered its earnings guidance for its current fiscal year.
Like Macy’s, the stock’s price was hit hard in pre-market trading, sinking 14% to US$44.50.