Macy’s Blames Big Loss on Weak Christmas Sales
NEW YORK — R. H. Macy & Co., one of the nation’s best-known retailers, Tuesday blamed a weak Christmas season and its competitors as it reported a $39-million loss for its second quarter.
New York-based Macy, which owns the Bullock’s and I. Magnin stores in Southern California, said the loss resulted from “turmoil†during the holidays created by competitors who discounted aggressively. The retailer was taken private in a 1986 leveraged buyout.
The U.S. department store chains operated by Campeau Corp. of Canada--including Bloomingdale’s, Jordan Marsh and other stores--cut prices heavily over the holidays to raise cash to pay their debts. They filed for bankruptcy protection in January.
Macy’s loss for the fiscal quarter ended Jan. 27 contrasted with a profit of $72.6 million in the year-ago period, the company’s quarterly financial statement said.
While Macy had reported that a loss for the quarter was likely, the decline’s magnitude surprised some industry analysts.
In a letter to investors, Macy said its strategy had been to protect its share of the market and pare inventories. The strategy worked, Macy said, as sales rose 7.2% to $2.44 billion in the quarter. Sales at stores open longer than one year rose 5.4%. But the increases came at the expense of profits.
“As expected, margins were severely affected by unusually heavy promotions, but we believe this was an atypical time,†Chairman Edward Finkelstein said in the letter.
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