Macy's operates seven regional buying offices and some believe that is at least five too many, according to a New York Post report.
While Macy's has operated its regional offices to stay closer to consumers in those markets, there are many who point to others such as J.C. Penney, Kohl's and Nordstrom that have stayed true to their shoppers while centralizing buying at one location.
Many believe it is simply inefficient for Macy's to operate so many buying offices.
"Macy's cost structure is too high, and, as a result, their prices are too high," Robert Buchanan of A. G. Edwards told the Post. "That is a key reason why they are likely to lose market share."
According to the analyst, Macy's expense to sales ratio is 32 percent compared to 27 percent for Nordstrom and 25 percent for Kohl's and Penney. Mr. Buchanan estimates that Macy's could save up to $100 million a year if it were to shut five of its buying offices. He does favor moving regional buyers to the remaining purchasing offices to respond to the needs of more localized markets.
Discussion Questions: Do you agree with the logic that would see Macy's close most of its regional buying offices? Generally speaking, do you see centralized buying as being preferable to regional purchasing structures?