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U.S. NEWSFriday 8 January 2016

Big-dollar baby formula thefts stump US police Job cuts at Macy’s signal hard
time ahead for some retailers
MICHELLE L. PRICE stores in Logan and three fered more than $2 million
Associated Press other northern Utah cities, in formula annually. A. D’INNOCENZIO
SALT LAKE CITY (AP) — The and officers are looking for Investigators working on AP Retail Writer
recent arrests in Utah of ties to similar recent thefts that sting — called “Opera- NEW YORK (AP) — Macy’s is slashing jobs, a harbinger
three people accused of in Idaho cities about 150 tion Hot Milk” — said thieves of hard times for retailers after a holiday season that
stealing thousands of dol- miles away, Police Capt. were paid between $100 saw a noticeable shift to online shopping and away
lars’ worth of baby formula Curtis Hooley said. and $300 a day and used from physical stores.
is the latest example of a In Pleasanton, California, multiple lookouts while fill- The nation’s largest department store chain, which
problem that officials say thefts of large amounts of ing bags with formula. They also operates Bloomingdale’s, said late Wednesday it
is vexing stores and police formula are reported at hit 15 or more stores a day is cutting up to 4,800 jobs and trimming its profit out-
nationwide as thieves sys- least once a month, with and later repackaged the look after a miserable holiday season.
tematically swipe the mix- thieves frequently hitting formula and sold it in other “I think Macy’s is likely to be a canary in a coal mine,”
ture from shelves and resell multiple stores around the states, authorities said. said Ken Perkins, president of Retail Metrics, a retail re-
it to unsuspecting parents. San Francisco Bay Area, The Infant Nutrition Council search firm. He said retailers witnessed an acceleration
Baby formula is a major according to police Lt. Kurt of America, an association of the shift toward online and mobile holiday spending
expense for many new Schlehuber. of baby formula manufac- in 2015.
parents, with small can- He doesn’t think the culprits turers, does not keep sta- About 2,110 of the job cuts at Macy’s will come from
isters starting around $20 are parents trying to feed tistics on the thefts but said reducing staffing at stores, eliminating duplications
and special or prescription their kids. it’s a continuing problem in back-office operations and consolidating regional
store groups. The remaining 2,710 job cuts will come
This photo provided by the Logan, Utah, Police Department shows baby formula seized as evi- from the store closings that Macy’s announced last
dence in a police department storage room in Logan. Police say they’ve arrested two women fall, spokesman Jim Sluzewski said.
and a man they believe stole more than $5,200 worth of baby formula and a few other items from As of Wednesday, Macy’s had about 163,000 workers.
northern Utah stores. Logan Police Capt. Curtis Hooley says the three were arrested Monday, Dec. The moves are part of Macy’s ongoing campaign to
28, 2015 and are being held in the Cache County jail on suspicion of theft and other charges. position itself to compete in a retail world where in-
creasingly demanding shoppers are going back and
(Logan Police Department via AP) forth between stores and their mobile devices. Ana-
lysts expect more retailers to announce they’re shrink-
blends costing two or three “There are people that are nationwide. ing their store counts further and making other moves
times that. making money off of selling “We’re not talking about to make their organizations leaner.
It’s also widely used. More the stuff,” Schlehuber said. petty shoplifting,” said Jen- With store traffic down, stores had to discount more.
than a third of infants re- In April, Pleasanton police nifer Hatcher, a senior vice Mother Nature also hurt holiday sales too, particular-
ceive formula in addition arrested two people sus- president for government ly at clothing stores. Unseasonably warm weather in
to breastmilk in their first pected of stealing dozens and public affairs at the some regions in the U.S. squelched shoppers’ demand
six months, the Centers for of containers of the prod- Food Marketing Institute, for cold-weather goods. Perkins expects fourth-quar-
Disease Control and Pre- uct. Officers happened to which represents supermar- ter earnings to increase a meager 0.3 percent for the
vention estimates. Often, see the pair running from ket chains, small grocery 119 retailers he tracks, compared with a 12.5 percent
babies who are weaned of the store with shopping stores, pharmacies and increase a year ago.
breastmilk will continue to baskets full of formula. But other food retailers. Macy’s, which has corporate offices in Cincinnati and
drink formula into their tod- arrests can be rare when Large thefts can be a par- New York, says sales at existing stores and excluding li-
dler years. police often have only an ticularly costly problem for censed departments fell 5.2 percent in November and
The high price and broad anonymous face captured many such stores, which December. It said that the warm weather was the big-
demand make it an entic- by a surveillance camera, are required to keep a gest culprit. That forced Macy’s to step up discounts
ing target for thieves, who Schlehuber said. minimum amount of for- to clear out mounds of merchandise. Business was also
typically sell the stolen for- Around the country, law mula on their shelves to ac- hurt by lower spending by international tourists.
mula at flea markets or list enforcement agencies in cept customers spending But, like other retailers, Macy’s is also contending with
it on websites like Craigslist recent years have reported money dispersed through broader changes in spending habits.
and eBay. heists ranging from thou- the federal Women, Infants Macy’s had been a stellar performer since the reces-
In late December, police sands to several million dol- and Children nutrition pro- sion as it localized merchandise, cut costs and devel-
in Logan, about 80 miles lars’ worth of baby formula. gram, known as WIC. oped exclusive brands that set itself apart from others.
north of Salt Lake City, con- In 2009, Florida authorities Hatcher said the industry But increasingly, Amazon.com and other online rivals
fiscated 422 cans of sto- arrested 21 people ac- has been working to com- are becoming a threat. It also has acknowledged that
len formula worth $8,000 cused in an elaborate theft bat the thefts for about 15 customers are spending more of their money on expe-
to $10,000. It came from ring that officials say pil- years.q riences like eating out and spas, instead of on clothing.
And when they do buy fashions, they are more likely to
buy name brands at fat discounts at such stores like
T.J. Maxx.
In response, Macy’s has been working hard to expand
its online services while pursuing new growth oppor-
tunities. It purchased upscale beauty brand Bluemer-
cury last year and made its first foray into discount
stores under Macy’s Backstage to go head-to-head
with T.J. Maxx.
“In some cases, there will be short-term pain as we
tighten our belt and realign our resources,” said Terry
J. Lundgren, chairman and chief executive at Macy’s
Inc. in a statement. “But our eye is on a long-term vi-
sion of Macy’s Inc. as a dynamic retailer that serves
existing customers and acquires new ones through in-
novative approaches.”q