Macy’s, one of the largest department store operators in the United States, has announced plans to close approximately 150 of its namesake stores while focusing on opening new locations for its higher performing chains. The decision comes as Macy’s seeks to chase sales growth and adapt to changing consumer preferences.
The closures will primarily affect Macy’s department stores, particularly those located in struggling malls. The company has identified these stores as underproductive or unprofitable and aims to address this issue by closing them. While the specific locations have not been disclosed, Macy’s had previously announced the closure of five namesake stores in Arlington, Virginia; San Leandro, California; Lihue, Hawaii; Simi Valley, California; and Tallahassee, Florida.
In contrast, Macy’s will invest in the approximately 350 namesake locations that will remain open. The company is testing ways to improve customer service at 50 of its stores, including offering more support in fitting rooms and shoe departments. Additionally, Macy’s is pursuing its strategy of opening smaller stores in suburban strip malls, with plans to open up to 30 of these shops over the next two years. These smaller stores are about one-fifth the size of traditional mall stores.
According to Macy’s CEO Tony Spring, there is a significant difference between the stores that will close and those that will remain open. The 150 stores earmarked for closure represent 25% of Macy’s square footage but less than 10% of its sales. Spring emphasized the company’s focus on having the best stores rather than the largest number of stores.
Bloomingdale’s, a higher-end department store chain owned by Macy’s, has outperformed the Macy’s namesake stores and will see expansion in the coming years. The retailer plans to open around 15 new Bloomingdale’s stores over the next three years, targeting new markets. Bloomingdale’s caters to higher-income and fashion-forward shoppers, carrying many popular luxury brands. The brand has also been testing a smaller concept store called Bloomie’s.
Bluemercury, a beauty chain owned by Macy’s, has been the standout performer among the company’s brands. It was the only brand to post comparable sales growth in the fourth quarter. To capitalize on this success, Macy’s plans to open at least 30 new Bluemercury stores and remodel approximately 30 existing stores over the next three years. Bluemercury has been testing a new store prototype that includes more spa services, which has been rolled out in two locations.
Overall, Macy’s strategic shift reflects its commitment to focusing on what is working for its business. By closing underperforming stores and opening new locations for higher performing chains like Bloomingdale’s and Bluemercury, Macy’s aims to drive sales growth and cater to changing consumer preferences. The company’s move comes under the leadership of CEO Tony Spring, who took over earlier this month. With these changes, Macy’s is positioning itself for a more successful future in the retail industry.
