New York City New York & Co. said Monday it plans to close 10 to 15 stores in 2009 and cut more than 300 management and corporate positions as part of a multi-year cost-cutting program.
Total store closings over the next five years will be up to 50, the company said.
It expects to generate roughly $175 million in pre-tax savings as a result of the cutbacks. Of that, the retailer said it expects to realize $30 million in 2009.
It projects total costs in the fourth quarter of about $25 million.
December sales for the chain dropped by more than 10%.
“These are unprecedented times in the retail industry and across many other industries and geographic regions,” said Richard Crystal, CEO, in a statement. “These times require financial discipline, and our company’s leadership team has given a great deal of thought as to how we can reduce existing expenses, enhance efficiencies and focus on our strategic plans for the future.”
New York & Co. did not identify the store locations that will close, other than to say they are underperforming locations. They will be shuttered when their leases expire, or when exit provisions can be used, to reduce costs. It expects to record $22 million in charges related to the closings in the fourth quarter of 2008. The projected annual savings from the closures, beginning in 2009, will be $4 million to $6 million.
The job cuts will affect 260 managers and 50 corporate office jobs, representing a 12% cut of the company’s management and a 10% reduction of corporate workers. The job cuts are expected to save $12 million a year, starting in 2009, and will result in a fourth-quarter charge of $3 million.
The retailer has also implemented a broad cost-cutting program expected to net a savings of $14 million to $17 million per year beginning in fiscal year 2009. New York & Co. also plans to limit new store openings over the next year and has cut its capital expenditures plan to $15 million, from $35 million in 2008.
New York & Co. operates 600 stores in 44 states.