Macy's struggles out West

The department store chain had the weakest third-quarter results on the West Coast and Florida (no details offered). As a result of the lousy market - what CFO Karen Hoguet described as "the most challenging business environment that I have experienced" - the company is delaying store openings and canceling other projects to conserve cash (capital expenditures will be cut to around $550 million from about $1 billion). And there will be store closings (rumors place the number at anywhere from 50 to 90). From Houget's conference call:

We do feel very prepared for the next 60 days. Our assortments are looking great and full of great values and newness. Our price points are sharper than ever, our promotions are powerful, and marketing strong. And our stores and sales associates are providing better service than ever before, based on our consumer surveys. But, we can only control so much. We will have to see how it plays out but we still hope to improve on our third quarter sales trend. And don’t forget the calendar shift this year and last year’s very strong November. As a result, we are expecting the month of November to be down low double-digits, even though we expect the quarter to be down 1% to down 6%. And like all holiday seasons that I can remember, it will be a nail-biter.

Overall, Macy's lost $44 million in the quarter, compared with net income of $33 million a year earlier. Here's the Bloomberg story. One very interested player: the Los Angeles Times, which relies heavily on Macy's advertising, especially now. If anything ever happened to those ad revenues, well, let's just say it would make the current cutbacks look like child's play. Macy's, by the way, has given no indication about changes in its marketing plans.