(Reuters) - Department store operator Macy's Inc (M.N) said it would close 14 stores in early spring 2015 and cut some jobs to focus on its popular services such as in-store pickups for online orders and "ship-from-store".
Macy's, which owns the high-end Bloomingdale's chain, said the move would help offset higher expense expected from healthcare and retirement plans.
The retailer said its workforce is expected to remain at a level of about 175,000 as it expects to hire associates to expand its direct-to-consumer business.
Macy's has spent nearly $2 billion on IT and e-commerce projects over the past five years to compete with online giants such as Amazon.com Inc (AMZN.O).
Ship-from-store, a service that allows customers to order from another Macy's store if the item is not available and have it sent to their home, has helped Macy's keep a tight hold on inventory.
Picking up goods from stores after ordering online, a service being rolled out at all large Macy's and Bloomingdale's stores, has also gained popularity as shoppers can save shipping charges and collect orders when they want.
Macy's also said same-store sales for the holiday shopping period rose 2.7 percent.
"Macy's and Bloomingdale's websites, apps and fulfillment systems performed exceptionally well in the holiday season," Chief Executive Terry Lundgren said.
The restructuring is expected to save about $140 million per year beginning 2015. Macy's would record charges of about $100 million to $110 million in the fourth quarter.
Macy's said it would hire about 1,500 associates this year at the direct-to-consumer fulfillment center in Oklahoma which will start functioning in April.
The company said in 2013 that it would build a $170 million fulfillment center in Tulsa County to ship more orders to customers in the central and southern United States.
The store closures announced on Thursday include three stores in Ohio and three in California.
Macy's operates about 840 stores, including 13 Bloomingdale's outlets, according to its latest quarterly filing.
The company also said it would create a team to explore opportunities for a Macy's off-price business.
Macy's narrowed its fourth-quarter comparable sales growth forecast for owned stores to 1.9-2.4 percent from 1.8-2.8 percent.
The company's shares were down about 3 percent after closing at $67.81 on the New York Stock Exchange on Thursday.
Reporting by Devika Krishna Kumar in Bengaluru; Editing by Don Sebastian