The 11 Macy’s stores to be closed range in size from a 3,000-square-foot shop in the Mauna Lani Bay Hotel in Hawaii to the 210,000-square-foot unit in the Bellevue Center in Nashville. Two stores in Colorado and Pennsylvania and single units in California, Florida, Indiana, Minnesota and Missouri are also affected. A total of 960 jobs will be lost. Macy’s expects costs for the closures to total $65 million, about $12 million of that sum in cash, and the majority of these to be accounted for during the current fourth quarter. 

But the closings added to the concern about escalating job losses. In a statement endorsing both a new stimulus plan from Washington and Congressional approval of the Employee Free Choice Act, Stuart Appelbaum, president of the Retail, Wholesale and Department Store Union, commented, “In the wake of the worst holiday shopping season since the Great Depression, Macy’s Inc.’s decision to close 11 stores — at a cost of almost 1,000 workers’ jobs — is only a harbinger of what’s to come. But now it’s no secret that what’s happening in the retail industry is far different from the cyclical downturn retailers have seen in the past. Against the backdrop of the collapsing housing and credit markets, even unprecedented holiday discounts failed to revive what were already sagging sales. In 2008, roughly 148,000 stores closed their doors before the holiday shopping season even began. In November alone, 91,300 retail jobs were lost.”

Across-the-board promotions that began as early as October couldn’t save Christmas for most retailers this year, as consumers pinched pennies and curtailed holiday shopping in the face of frightening financial and job data.

“Even with all the discounting, retailers didn’t see that pop because everyone was doing it,” said Stephen Hoch, Wharton School marketing professor and director of the Baker Retailing Initiative, explaining why even mass merchants like Wal-Mart were seeing a comp slowdown. “The discounting all canceled itself out.”

The mantra for today’s retailer is “gotta cut, gotta cut, gotta make sure I don’t hit a main artery,” said Hoch, who added that the companies emerging from the current economic slowdown will do so with their brands intact, even if their scope is smaller. This will entail closer management of promotional activity, which was “widespread” during the holiday, he said.

With discounts deeper and time to shop for the holidays running out, December did represent a slight improvement over November’s dismal results, said Frank Badillo, senior economist at TNS Retail Forward. “It’s encouraging that most retailers saw some improvement in their numbers compared with November,” he said. “These results provide signs that retail weakness may be bottoming out.”

That provided little consolation for better stores. Neiman Marcus Inc. had the worst results of all the retailers tracked by WWD, with comps down 27.5 percent during the month. Saks Inc. and Nordstrom Inc. declined 19.8 and 10.6, respectively.

“We are disappointed in our results and making every attempt to improve sales,” said Burt Tansky, C.E.O. of Neiman Marcus. “It was the most difficult Christmas season we have been through.” However, “Our inventories are coming down and moving closer to demand and new spring deliveries have been arriving for the past six weeks.”

At Saks, Stephen I. Sadove, chairman and C.E.O., commented, “It’s a difficult environment and the luxury consumer is holding back on their spending.” He also noted that comparisons are difficult, too, considering that, a year ago, Saks posted double-digit growth. “The consumer is reflecting how they feel about net worth, the stock market, purchasing and holding back.”

On the positive side, he said Saks cleared out a lot of excess inventory and that people responded to more aggressive promotions: “Spring product is on the floor. We are well positioned. We have far less clearance on the floor than a year ago.”

While clearly not happy with the selling environment, Sadove did point out, “We feel very good where we are, relative to the capacity we have on our revolver [credit facility], the expense actions that we are taking and our ability to weather the storm.”

Saks has a $500 million revolving credit facility that’s only been modestly tapped and has a New York flagship that’s unencumbered. There are no short-term maturities of senior debt.
 Still, it’s been a sobering end of the year for anyone dependent on upscale consumption.

“The consumer is trading down, away from luxury,” said Matthew Katz, managing director at Alix Partners L.L.C. “The top tier had further to fall because they had such high gains in previous years.”

Carla Casella, managing director of high yield research at J.P. Morgan, agreed, pointing to Neiman’s “miss” as “driven by slightly less promotional activity.” She added the retailer is “less of a holiday destination than its lower-end peers,” but said its liquidity is “solid” and expects the company to build on its cash during the quarter.