What's Wrong With Macy's? Second Quarter Profit Drops 77%

By August 17, 2007

According to the Chicago Sun-Times, Macy’s has cut their yearly outlook after their second quarter profits dropped 77%. What’s the big problem?

The merger with May has not gone well for Macy’s, and they’re having trouble integrating the Marshall Field’s stores. From the Sun-Times:

Profits were hurt by higher-than-expected costs of integrating more than 400 former May Department Stores, including the Marshall Field’s chain. Macy’s bought the May Department Stores for $11 billion in August 2005.

But cost cuts helped shrink selling, general and administrative expenses.

Sales at the former Marshall Field’s and other May stores continue to disappoint, but are closing the gap in performance with long-time Macy’s stores, Chief Financial Officer Karen Hoguet said in a conference call with analysts.

The gap should close next year, but the converted Marshall Field’s stores might take longer to gain acceptance, Hoguet said. Long-time Macy’s stores were hurt by missteps in color and style in ready-to-wear clothing in the spring. Hoguet said Macy’s executives believe they have the right fashions for fall, such as denim, wide-leg pants and novelty jackets and coats.

Are they really that shocked that the Marshall Field’s faithful have stayed away from Macy’s? Are wide-leg pants the answer?

Tell us: What’s wrong with Macy’s?

Macy’s cuts outlook after profit falls 77 percent for the quarter [Chicago Sun-Times]
(Photo:Meghann Marco)

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Comments

  1. FreedomOfSpeech says:
    September 3, 2007 at 7:15 am

    I worked for Macy’s up until a few months ago and I too miss the May company. They treated their employees so much better. Macy’s likes working on skeleton crews and thinks it’s ok to have one person working the juniors and kids departments. They also think it’s ok to work everyone eight days straight with just one day off in between. That one day off is cherished but not nearly enough to recuperate from trying to clean the dressing rooms and the department all by yourself, getting chewed out by customers constantly because you are the only employee on the floor and they had to wait inline ten minutes for you to ring them up, and being scolded by managers because you didn’t get three people to open a Macy’s account that week. I always felt bad asking someone to open an account because the credit card services are horrible and the interest rate is absurd. Plus, who isn’t in debt already?

    I agree with PHRYGIAN about the choice of clothing. Even the enticement of my employee discount could not make up for their hideous choice of clothes. It wasn’t much of a discount anyway after the 21%+ interest kicked in since we had to purchase with our Macy’s card to get the “discount”.

    THEANTIESTABLISHMENT is right about Macy’s demoralizing is employees. The older members of the staff at my store were written up for the most idiotic things so that they would have enough write-ups to fire them if they so wished, since their measly $11 wages are the cause of all their money problems. No, I think it’s CEO’s total compensation of $15,647,117. And that was just for 2006. Some of the commissioned employees also noticed that the percentage they got for certain sales was reduced without being notified of it. I guess the company thought they were stupid and they would not notice. It’s just a little obvious when your paycheck declines dramatically. I was also threatened at least once a week that I would get a poor review because I rarely opened Macy’s accounts. I didn’t care because that meant I would miss out on an entire 5 cent raise. Big whoop!

    Well, I finally got out of that hell hole and got a job that doesn’t give me the urge chase a bottle of Xanax down with a bottle of Vodka. All I can say is that I sympathize with the victims of Macy’s. I feel your pain.

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