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Originally published Thursday, February 7, 2008 at 12:00 AM

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Macy's to close Northwest office

About 750 employees will be laid off as the Northwest office is folded into Macy's San Francisco-based West division, while the top executives will soon leave for jobs elsewhere with Macy's.

Seattle Times business reporter

For Seattle, Macy's cost-cutting announcement Wednesday that it is closing its Northwest management office downtown is a lot like losing a corporate headquarters.

About 750 employees will be laid off as the Northwest office is folded into Macy's San Francisco-based West division, while the top executives will soon leave for jobs elsewhere with Macy's.

The Northwest office of the Cincinnati-based retail chain works out of the historic, eight-story building at Third Avenue and Pine Street, above Macy's regional flagship store, formerly The Bon Marché.

To kick off the holiday-sales season every year, Macy's sponsors a downtown parade and star-lighting ceremony — something that will now be handled out of San Francisco rather than Seattle.

In an interview Wednesday, Macy's Chairman and Chief Executive Terry Lundgren said the company will "continue to be very supportive" of those types of activities, adding: "Even in times like this, we think it's important to be very connected to the community."

As part of its massive shake-up, Macy's also is consolidating its Minneapolis-based North organization into its New York-based East division, and its St. Louis-based Midwest organization into its Atlanta-based South division. About 950 jobs in Minneapolis and 850 jobs in St. Louis will be eliminated.

The reorganization, which is expected to be completed in the second quarter, will allow Macy's to reduce its overhead costs by about $60 million this year and $100 million a year starting in 2009, the company said.

Macy's reported Wednesday that sales at stores open at least a year fell 7.1 percent in January, worse than what Wall Street had been expecting. Although analysts approved of the cost-cutting, Wall Street appeared disappointed with the sales results, and shares of Macy's ended the day down $1.16 at $23.94.

Changes in operations

Also Wednesday, Macy's said it is decentralizing buying operations to improve merchandising to each region, resulting in about 250 jobs added back nationally, including 60 in Seattle.

Locally, store merchandisers and planners will oversee smaller buying groups covering 68 stores in Washington, Oregon, Idaho, Montana, Wyoming and Utah.

"Their job is to be in stores on a very frequent basis and listening to customers," Lundgren said. "The whole idea is for us to re-allocate our financial resources into the stores and get direct feedback about what it is customers need in Seattle. It could be more size 12s and fewer size 0s, or more black and less pink."

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Seattle employees losing their jobs worked in human resources, financial accounting, public relations and special events. They will receive undisclosed severance benefits and help finding other jobs.

Macy's will continue to employ about 1,600 at its Seattle-area stores. A salesman downtown said an office closure like the one announced had been rumored for a couple of years.

"We knew this was going to happen. I don't think it will affect us that much," he said, referring to store employees. "Our paychecks come out of Cincinnati."

Moving to S.F.

Jeffrey Gennette, 46, currently chairman and chief executive of the Northwest office, will move to San Francisco and take over as chairman and chief executive of the West division, replacing Robert Mettler, 67, who has postponed his July retirement to oversee special projects.

Gennette moved to Seattle in February 2006 after serving two years as executive vice president in Atlanta.

Robert Harrison, 44, president and chief operating officer of Macy's Northwest for the past two years, will remain in Seattle through the transition. Ultimately, he'll be reassigned, Macy's said.

Harrison serves on the Downtown Seattle Association's board of trustees and has been active in making Third Avenue "cleaner and safer," said association President Kate Joncas. She said she'll "work very hard with the leadership in San Francisco" to ensure Macy's continued support.

"I didn't see it coming, and it's concerning. But retail is always tough, and it's something we're going to have to work through," Joncas said.

The downtown Macy's store dates back more than 115 years when Seattle pioneers Josephine and Edward Nordhoff opened a dry-goods store, called The Bon Marché.

The store thrived and eventually was sold to the Hahn chain of Chicago, which, in turn, became part of Allied Stores. The Bon was part of Federated Department Stores in 1994, when the Ohio-based retailer acquired R.H. Macy & Co. In 2003, Federated re-branded its regional department stores Bon-Macy's, and two years later simply Macy's.

Amy Martinez: 206-464-2923

Copyright © 2008 The Seattle Times Company

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