According to sources, the well-known US department store company Macy’s has stated that it intends to close up to 65 locations by the end of January 2025—15 more than it had originally anticipated. The decision is part of the retailer’s ongoing “Bold New Chapter” strategy, according to CEO Tony Spring, who made the announcement during the company’s Q3 earnings call. In total, the department store company intends to close up to 150 locations by 2026. According to Adrian Mitchell, CFO at Macy’s, store closures would be carried out strategically, with a special emphasis on underperforming areas.
The decision to expedite store closures comes as Macy’s encounters increasing difficulties due to shifting trends in consumer behavior in US, including a stark shift towards online shopping. According to Spring, the decision aims to develop a more successful and sustainable company strategy. He declared, “This initiative brings us one step closer to becoming a more profitable Macy’s, Inc.” Despite a 3.2% increase in same-store sales, Macy’s reported a 2.4% drop in overall net sales for the quarter, totaling $4.7 billion. The sophisticated, modern clothing worn by ladies was a major factor in this. Along with new companies like Jenni Kayne and Kim Kardashian’s Skims, other expanding areas were digital and beauty.
In the meantime, the third quarter saw excellent growth for the retailer’s luxury divisions, including Bloomingdale’s and Bluemercury. Macy’s is dedicated to expanding its luxury items and online presence, even in the face of store closures. Macy’s is dedicated to expanding its luxury items and online presence, even in the face of store closures. Mitchell reaffirmed that only those locations where the economics are bad will be closed, adding that Macy’s does best in markets where it has both a physical and an online presence. “We still observe that we have the best economics when we have both a physical and digital presence,” Mitchell added.
Opening and renovating stores is another aspect of Macy’s strategy. The company intends to renovate 50 important stores, referred to as the “First 50,” which will serve as examples for new sites. In Q3, these stores’ sales increased 1.9%. In the fourth quarter of 2024, Macy’s also intends to renovate two existing locations and open nine new ones. Since many physical stores find it difficult to compete with online retailers, the closures are a part of a larger trend that is impacting the retail sector. Support for Macy’s strategy was voiced by activist investor Barington Capital Group, who said that eliminating low-productivity sites could eventually result in healthier stores with more sales and profits.
A recent internal inquiry into an employee who reportedly concealed $150 million in expenses is just one of the many difficulties Macy’s has encountered. However, the inquiry found that the company’s financial performance was unaffected by these mistakes. As part of its efforts to adjust to shifting retail patterns and concentrate on profitable development in an increasingly digital buying environment, Macy’s has decided to close several of its stores.
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