FILE PHOTO: The sign of a Macy’s department store is pictured in Pasadena, California May 12, 2015. REUTERS/Mario Anzuoni
(Reuters) – Macy’s Inc (M.N) said on Thursday it aimed to save $400 million to $550 million annually in the next two to four years, as the department store chain cuts back on discounts, sending its shares up 5% in mid-day trading.
The 160-year-old company, which has been spending heavily on remodeling its stores and building off-price and online businesses, has relied on discounting to clear inventory, a move that has hurt its earnings.
Speaking at a retail conference hosted by Goldman Sachs, Chief Financial Officer Paula Price said some of the savings will be supported by better prices as the retailer moves towards targeted promotions for customers.
“We know that some of our customers respond particularly well to coupons while others do not. And so using data and customer analytics, we can become more precise on who we target with promotions and what offers we provide,” Price said.
Macy’s, the largest U.S. department store chain, has closed more than 100 stores and cut thousands of jobs as mall traffic falls amid a shift in customer preference to shop online.
The company said it is also testing self checkout in stores and rolling out new modernized handheld devices for staff to improve efficiency.
The retailer also said it expects to drive about $100 million in additional working capital improvements.
Earlier this year, Macy’s said it would cut 100 senior management positions to reduce costs and improve profitability.
Reporting by Nivedita Balu in Bengaluru; Editing by Anil D’Silva and Shailesh Kuber