Page last updated at 19:08 GMT, Monday, 2 February 2009

Macy's announces 7,000 job cuts

Shopper with Macy's bags
US retailers are facing hard times

US department store chain Macy's is cutting 7,000 jobs as it reduces costs against a backdrop of falling sales.

Sending shares in the firm down 11%, Macy's said the redundancies would affect both store and office positions.

With a current workforce of about 180,000 people, the cuts represent about 4% of its staffing levels.

Macy's said it hoped the move would allow it to make an annual saving of $400m (281m). It added that it will likely report a fall in annual sales.

'Tough 2009'

It predicts that annual same-store sales - which excludes new shop openings - will be between 6 and 8% lower.

They have not been competing on a value proposition and this is a value market
Patricia Edwards, retail analyst with Storehouse Partners

The firm said tough trading conditions would continue throughout 2009.

Macy's has 810 stores across the US.

US consumer spending fell for a sixth consecutive month in December, according to the latest data released by the Commerce Department on Monday.

Analysts said Macy's would have to start cutting prices to win more customers.

"The retail environment has changed so much," said Patricia Edwards, a retail analyst with Storehouse Partners.

"They have not been competing on a value proposition and this is a value market."



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