In a move designed to create a more seamless supply chain for both its customers and personnel, one of the nation's largest department stores on a sales basis is preparing to close one of its New England-based warehouses.
In a letter submitted to the Connecticut Department of Labor and obtained by Supply Chain Dive, Macy's announced its ceasing operations at its South Windsor warehouse, the process for which is scheduled to begin in mid-November.
Closure to wrap up in mid-February
The shuttering will occur in phases, according to the letter, with the first wave taking place between Nov. 17 and 30, the second from Nov. 30 to Dec. 13 and the third Feb. 1 through Valentine's Day.
Macy's is one of several primarily brick-and-mortar department stores that has closed a number of locations throughout the country in recent years as customers shift many of their in-person shopping preferences online. The likes of Amazon, Overstock.com and more have fundamentally altered the retail playing field by prioritizing convenience paired with low prices to earn buyer loyalty.
"Macy's Backstage has over 200 locations in the U.S."
Throughout its tenure, Macy's South Windsor-based facility fulfilled orders for Macy's Backstage, an arm of the Macy's brand that sells many of the same products, but for less. Since launching in 2017, the specialty outlet chain has grown to over 200 locations.
Hiring 400 full-time workers in Columbus
A Macy's spokesperson told Supply Chain Dive that the company decided to suspend operations in South Windsor in order to centralize and optimize its supply chain. Earlier this year, the company opened a separate Backstage-dedicated warehouse in Columbus, Ohio. All told, nearly 80 workers will receive job termination notices as a result of the closure, but some may be able to remain employed at if they're willing to relocate. The one in Ohio will hire 400 full-time workers, along with seasonal workers, resulting in a net gain of jobs for the company and the U.S. economy.
Supply chain management has been more of a priority for the Cincinnati-based department store lately. Back in April, Macy's hired its very first chief supply chain officer, Dennis Mullahy. He noted at the time that the company sought to further invest in the supply chain "to improve our systems, processes and facilities and to enhance productivity and efficiency."
In an earnings call this past August, Macy's CEO Jeff Gennette noted that some of the same process improvements for its flagship it also seeks for Macy's Backstage.
"This [distribution center] operates on the Google cloud platform, getting us improved efficiency, speed and scale to support the continued growth of our off-price business," Gennette explained, as reported by Supply Chain Dive.
Outlet stores like Macy's Backstage, Burlington Coat Factory and TJ Maxx are experiencing increased customer volume of late due in part to the ongoing trade war, which has caused prices for certain products - like clothing - to creep higher. As noted by UBS Analyst Jay Sole, tariffs have fueled order cancelations among many full-price retailers, enabling their off-price contemporaries to buy up what isn't sold and pass on those savings to consumers.