Macy's Inc. announced the closure of 11 stores including one on the Big Island yesterday.

The announcement, which followed an earnings report that indicated same-store sales were down 4 percent in December and 4.6 percent year-to-date, was made in the midst of what top Macy's chief executive Terry Lundgren termed “;the most challenging economic environment in memory.”;

A 3,000-square-foot Macy's store located at the Mauna Lani Bay Hotel on the Big Island is listed among the closures. The store, which opened in 1983, employs three workers.

“;Macy's overall is not doing well so they are naturally going to want to group most of their resources in their core markets,”; said Honolulu-based retail analyst Stephany Sofos. “;The Mauna Lani Bay Hotel's occupancy has been inconsistent so the tourist market there has not helped them balance their store.”;

Other larger closures will take place in California, Colorado, Florida, Indiana, Minnesota, Missouri, Pennsylvania and Tennessee. The Hawaii store will not hold a final clearance sale; however final sales will begin within the next week for all other locations.

Following the store closings, Macy's will operate 848 stores including: 808 Macy's and 40 Bloomingdale's. Costs associated with these 11 store closings will be approximately $65 million, most of which will be booked in the fourth quarter of 2008.

“;The decision to close stores is difficult, and often occurs when the market changes, new competing shopping centers are opened nearby to existing older ones, or when customers change shopping habits. In the store closing process, we are committed to treating affected associates with respect and openness,”; Lundgren said.

Despite the closures, Macy's is still going ahead with plans to open three new Macy's stores and one replacement store this year. Affected associates in good standing may be considered for open positions at other Macy's locations. Regular full-time and part-time associates who are laid off due to a store closing will be provided severance benefits and outplacement assistance.