Port dispute hurts Macy’s profit
Down 13 percent at least partly due to products being held up on West Coast
May 18, 2015
by
By Anne D'Innocenzio THE ASSOCIATED PRESS
CINCINNATI, Ohio—Macy’s first-quarter profit fell 13 percent as the department store chain faced delayed merchandise shipments from the West Coast port slowdown, severe winter weather and lower spending by international tourists.
The company, which has been a standout in retailing throughout the economic recovery, is the first of the major retailers to report first-quarter results. But the results, announced Wednesday, show the challenges it and other retailers face.
While gas prices are low and unemployment has dropped, stagnant wages have kept a lid on shopping sprees. Moreover, shoppers are spending money on other things, like health care and other services, and stores are also dealing with a shift toward shopping on mobile devices.
Some of the first-quarter problems are temporary. The lingering West Coast port dispute has cost retailers sales when merchandise didn’t arrive on time, and unusually cold weather hurt sales of early spring merchandise.
On top of that, Macy’s said that its stores in tourist towns such as New York City, Chicago, Las Vegas and San Francisco have been hurt by the decline in foreign tourists, partly because of the strengthening dollar that crimps their purchasing power.
Macy’s also cited that its reorganization of its merchandising, planning and marketing area caused some temporary disruption as executives in those areas learned new roles.