Macy's announced plans to close 65 stores by the end of the year, up from the previously planned 50, as part of its 'Bold New Chapter' strategy to focus on luxury growth and modernize operations. Despite the closures, Macy's is expanding its Bloomingdale's and Bluemercury brands, signaling a shift towards high-end retail. The closures come amid broader challenges in the retail sector, including a shift to online shopping and a drop in mall visits.
Macy's, the renowned department store chain, is set to close 65 stores by the end of this year, an increase from the previously announced 50. This decision is part of a broader strategy to overhaul its operations and focus on more profitable areas. Despite the closures, Macy's plans to expand its luxury brands, Bloomingdale's and Bluemercury, illustrating a strategic pivot towards high-end retail amid challenging times for traditional brick-and-mortar stores.
The decision to close more stores than initially planned comes as Macy's and other retailers face significant challenges, including reduced foot traffic in malls and a consumer shift towards online shopping. U.S. retailers have announced over 7,100 store closures through November 2024, a 69% increase from the previous year. Macy's closures are part of an effort to eliminate underperforming stores and reallocate resources to more profitable areas. This move is expected to affect locations across various states, although specific stores slated for closure have not been disclosed.
Despite the closures, Macy's is not retreating entirely from physical retail. The company announced plans to open new Bloomingdale's and Bluemercury locations, with a focus on luxury and high-end products. Approximately 45 new stores across these brands are expected to open in the next three years. Additionally, Macy's is modernizing its operations, which includes the remodeling of existing stores and the introduction of small-format locations. These efforts are part of Macy's 'Bold New Chapter' strategy to adapt to the evolving retail landscape and consumer preferences.
The store closures and strategic shifts come at a time when Macy's is also dealing with internal challenges, such as a recent scandal involving a rogue employee who hid $151 million in delivery expenses. This incident has prompted a thorough review and overhaul of Macy's financial controls. Despite these challenges, Macy's remains optimistic about its future, citing improvements in sales at remodeled locations and the strong performance of its luxury brands. The company has adjusted its financial projections for the year, reflecting both the challenges and opportunities ahead.
Macy's strategic decision to close stores while expanding and modernizing its more profitable brands reflects a broader trend in the retail industry towards consolidation and adaptation. As the company navigates these changes, the impact on employees, local economies, and the retail landscape will be closely watched. Macy's aims to emerge from this transition as a leaner, more focused company that is better equipped to thrive in the modern retail environment.
"We now expect to close roughly 65 locations this year." - Tony Spring, CEO of Macy's