Reports are in after the Christmas and end of the year shopping spree and many businesses such as Best Buy, J.C. Penney, Macy’s and others realize that they are only struggling when it comes to making a buck on retail. After the quarterly results, businesses are taking a look at what kind of solutions they can create to help them keep from drowning in a financial struggle. Some of these solutions even include cutting jobs from American citizens.
The biggest of the businesses struggling is Best Buy, a well-known electronics retailer who has had problems before. In 2012 businesses reports showed a drop in sales that threatened the company but a solution was created that was successful up until now. After the most recent reports Best Buy shares have dropped more than 28.5%, leaving 74 million shares being exchanged. The huge drop in this year’s holiday sales was so unexpected that the only solution may be selling the infamous business.
According to sources, Best Buy took many actions in an effort to compete with leading stores like Wal-Mart and Amazon.com during the holidays. They boosted marketing, extended store hours, and even opened new stores in certain locations. This move, however, cost more than it was worth and actually hurt the store rather than helping its finances, due to decreasing sales. Rumors are surfacing that Best Buy will be closing over 100 stores. CEO Hubert Joly has made no comment.
J.C. Penney, on the other hand, suffered a small loss but will be eliminating a large number of jobs. They have now announced that 33 of their stores are working towards cutting at least 2,000 employees. After reports on sales, J.C. Penney has also noted that their holiday sales were not what they expected and their profits are on the decline. In cutting the 2,000 jobs the store is hoping to see a rise in profitability. These cuts will supposedly save $65 million per year for J.C. Penney.
Macy’s has also announced job cuts after a less than desirable holiday season. Macy’s reports that they will be cutting at least 2,500 jobs among their stores. While Macy’s has not released much more information than that, they are currently working on a plan as their profits have also taken a hit.
As mentioned, Best Buy, Macy’s, and J.C. Penney are not the only businesses struggling to make a plan to bring up profits as other businesses are also seeing a downfall, but they are the only major businesses who are known to have created a plan of action so far.
Business experts have stated, however, that they expect to see many more businesses cut jobs, increase prices, decrease the number of stores, and create plans to try to bring in money after one of the worst holiday seasons to date. Many retailers are seeing their stock prices fall. Even businesses that don’t specialize in retail are seeing falling stocks. What will this drop mean for retailers across the nation?
Some are saying that they drop in retail are only surfacing because of a bad financial holiday but may start showing an increase in sales as the year continues on. J.C. Penney reported that they had been seeing a slight increase in sales in some months last year and only saw a major decrease for the month of December. Business experts are not expecting to see a change for Best Buy.
Americans are expected to reap the results of falling stocks and profits for struggling businesses like Best Buy, J.C. Penney, Macy’s and many other stores.
By Crystal Boulware