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CASE 8 • MACY’S, INC. — 2009 89

(10,860) and 12,000 more than J.C. Penney’s. Macy’s also leads in the area of total
revenues with $24.89 billion as compared with Dillard’s ($6.99 billion), J.C. Penney
($19.86 billion), and Saks ($3.03 billion).
In terms of gross margin, Macy’s also leads with 39.70 percent as compared with
Dillard’s 30.92 percent, and Saks’s 32.14 percent. Penney’s gross margin percentage is not
available for comparison. A review of the net income of Macy’s indicates that it had a loss
of $4.80 billion in 2008, Dillard’s lost $241.07 million, J.C. Penney had a positive net
income of $1.18 billion, and Saks lost $122.76 million.

U.S. Retail Clothing Industry in 2009
In an economic recession such as the 2007–2009 period of time, a comparison of same-
store year-to-year sales numbers becomes more important than in other economic periods.
The January 2009 sales changes for same stores as compared to January 2008 revenues for
selected retail clothing stores are as follows:

Store Name Change in Jan. 2008 to Jan. 2009 Revenues

The Buckle, Inc. +14.7%
Aeropostale +11.0%
Gottschalk’s +8.8%
Macy’s, Inc. -4.5%
Limited -9.0%
Chico’s FAS -10.9%
Nordstrom’s -11.4%
Dillard’s -12.0%
Kohl’s -13.4%
J.C. Penney -16.4%
Neiman Marcus -18.3%
Abercrombie & Fitch -20.0%
Saks, Inc. -24.0%
Source: Barbara Farfan, “January 2009 Same Store Sales Figures: Complete U.S. Retail Industry Report.”
About.com—Retail Industry. Available at http://retailindustry.about.com.

Because of the lack of sales growth among many retail clothing stores in 2008, the
following companies announced employee layoffs in January of 2009:

Store Name Number of Employee Layoffs
Saks, Inc. 1,100
Macy’s, Inc. 960
Neiman Marcus 375
New York & Company 310
Stein Mart 209
Chico’s FAS 180
Gottschalk’s “dozens”
Source: Barbara Farfan, 2009 Retail Industry Job Cuts: Top U.S. Retail Employee Layoffs and Unemployment.
About.com—Retail Industry. Available at http://retailindustry.about.com.

Conclusion
Macy’s press release of January 8, 2009, says the company was going to close 11 under-
performing stores as indicated in Exhibit 7. Chairman Terry J. Lundgren commented on
that revelation by suggesting, “These closings are part of our normal-course process to
prune underperforming locations each year in order to maintain a healthy portfolio of