There was once a time when Macy’s was a champion of the US mall business. As with many department stores these days, however, Macy’s has been inundated with pressure from the internet that is lessening its costumer base in the physical stores. As such, it is now looking to cut back at least 100 jobs while it consolidates its merchandising with plans to migrate private brand operations into a single department.
For now, though, the company has brought former eBay executive Hal Lawton to act as the new company president. Of course, he will oversee the consolidation efforts. Should his supervision manifest, the company is looking to save $30 million a year. This includes roughly $5 million—or 1 cent per share—for the fourth quarter of 2017, alone. The company says that this change will also include a one-time cost between $20 and $25 million, most of which in the third quarter.
Lawton will take to the helm on September 8, mostly in charge of branding. This will include merchandising, marketing, stores, and operations. He inherits this position from Jeff Gennette, who had only taken over as chief executive officer just last year.
Gennette went so far as to comment, “Hal Lawton has deep expertise at the intersection of retail and technology, a diverse set of business experiences that give him a unique perspective, and a track record of successfully driving a change agenda at scale. With Hal on the team, we will accelerate the integration of digital both online and in our stores.”
Lawton’s new appointment should help to demonstrate Macy’s commitment to adapting to the many “dramatic changes” occurring within the retail industry over the past several years according to Telsey Advisory Group head Dana Telsey.
In a research note, Telsey indicates: “That said, Macy’s remains somewhat of a show-me story as strategic initiatives around merchandising and the shopping environment, both in-store and digital, have yet to show a meaningful impact [on sales].”
Lawton takes the job with a starting salary of $1 million and a target bonus of $1.25 million target bonus. As you might also expect, he will receive stock options and shares (restricted to performance) worth approximately $4 million in the 2018 fiscal year. But this contract will also entitle him to another $5.5 million cash sign-on bonus as well as equity grants which have been valued at $10.5 million; all of this is intended to replace replace compensation in regards to what he might have lost by leaving his former employer.