Three retail stocks are trending on Friday.
Williams-Sonoma (WSM) stock price fell after CEO Laura Alber sold 20,000 shares of the company's stock. Yahoo Finance spoke with Alber about the company's outlook at the World Economic Forum in Davos, Switzerland.
Wayfair (W) stock soared after the e-commerce retailer announced it would cut 1,650 jobs, or about 13% of its workforce.
Macy's (M) is another retailer that is cutting jobs. Approximately 2,350 positions will be cut and five stores will be closed.
Yahoo Finance's Rachelle Akuffo and Akiko Fujita report on the details.
For more expert insights and the latest market trends, click here to watch the full episode of Yahoo Finance Live.
Editor's note: This article was written by Stephanie Mikulich.
video transcript
Rachel Akuffo: I'm looking at some retail stocks this morning. Williams-Sonoma, Wayfair, Macy's. Williams-Sonoma's decline began this morning, with SEC filings showing president and CEO Laura Alber selling a total of 20,000 shares. Now, she's just one of the few insiders who's benefited recently. Williams-Sonoma stock has risen more than 70% in the last year.
So this is one of those situations where investors are really going through and are looking for any hints about how the consumer is doing, especially on some of the big-ticket items that have really come under pressure over the past year. . We keep hearing on earnings calls that consumers are becoming more discerning or have more choice.
So it's interesting to see that continue, that tension continues to permeate here, Akiko.
Akiko Fujita: Yeah. However, as you pointed out, there was a huge increase in socks last week compared to last year. Therefore, there will probably be some profit taking as well. Let's talk about another company we're looking at today. Wayfair joins the chorus of companies announcing layoffs in recent weeks. The e-commerce giant is cutting more than 1,600 jobs. This represents approximately 13% of the workforce.
Stock prices jump on the news. Currently, its stock is over 8%. If you recall, Wayfair is one of the companies that has seen a huge uptick during the pandemic. And now we're seeing a bit of a correction. This is not necessarily limited to this field, but also applies to the technology field. Wayfair's CEO specifically said the company hired too much during the boom years. And that's when online shopping exploded. And now they have to retreat a little.
If you remember yesterday, we were talking about Google also announcing additional layoffs. So, Rachel, we see that despite what we're hearing about the economy and the possibility of a soft landing, there's still a lot of adjustment happening from the middle of the pandemic.
Rachel Akuffo: That's true. We're still getting used to it. And if you look at the memo that CEO Neeraj Shah put out on Friday that you mentioned, they said they over-hired when it came to the pandemic. But even before the pandemic, the company laid off about 500 employees in early 2020 as the economy was experiencing a downturn. Last year, the number of employees was 1,700. In 2022, the number will increase to 900.
So it's hard to tell whether this is simply an overemployment situation, as some of the layoffs were already occurring before the pandemic, while perhaps consumers have simply changed. We've seen many retailers still trying to figure out their consumers and what they're really interested in and what they're willing to splurge on.
But unfortunately, yes, job losses continue. With that in mind, Macy's is also cutting jobs. In addition to closing five retail stores, the company plans to cut more than 3% of its workforce. The company now says it wants to redirect spending to improve the shopping experience for customers.
And again, this is a post-pandemic situation. People returning to shopping malls. They're looking for a little more. If you're going to attract people and you're not going to offer as many bargains as you saw during the holiday season, you're going to need more incentive for them to come and spend. So this can be considered at least an attempt to improve the shopping experience.
Unfortunately, some of these companies are making other cuts and perhaps cutting less profitable parts of their business as they try to bring these customers back.
Akiko Fujita: Yeah. Rachel, you're talking about the changing consumer. Macy's is one of those names. Both pre- and post-pandemic, they are trying to find their footing in a changing retail landscape. We think of Macy's having large stores in shopping malls. But this company is trying to scale it back a bit. It's not just about closure. That means we're leaning on other brands like Bloomingdale's and Bluemercury to really try to go where the consumer is and figure out what that new combination looks like.
Given Macy's current situation, it's going to be a bit more of a struggle. But the fact is, the company is going through a major transformation right now, trying to reinvent itself to become a slightly more relevant brand in this environment.
Rachel Akuffo: That's true. Finding the right product mix can be difficult, especially when looking at other e-commerce options, as consumers have more products to choose from than ever before. And some of these are cheaper up-and-comers. And of course, there's the TikTok shop. People have far more choices than before. So there definitely needs to be a little more reinvention there.
