Struggling American retailer Macy’s to close 150 stores
The iconic but struggling American department store Macy’s announced plans on Tuesday to close almost a third of its eponymous locations by 2026 while building up its upscale Bloomingdale’s and Bluemercury brands.
In a new strategy aimed at breathing life into the 166-year-old retailer, the company said it would shut 150 “underproductive” Macy’s locations.
The plan, dubbed a “Bold New Chapter”, said around 50 stores would be closed by the end of the current fiscal year, without mentioning how many employees would be impacted.
The plan comes a week after Arkhouse Management unveiled a proxy challenge to replace nine members of the Macy’s board.
The challenge follows a rejection by Macy’s last month of an unsolicited takeover proposal from Arkhouse Management and Brigade Capital Management.
The company, which had also announced last month it would pare its workforce by 3.5%, said in a statement that the new strategy would prioritise investment in the remaining 350 Macy’s locations.
It also plans to open 15 Bloomingdale’s stores and at least 30 Bluemercury stores in new and existing markets over the next three years, along with 30 remodelled Bluemercury sites.
Department stores have seen their results suffer for years as consumers increasingly move online, and have been forced to reduce in size – a dynamic exacerbated by the Covid-19 pandemic.
These trends have put pressure on shopping malls throughout the United States, particularly older retail sites that have fallen out of favour.
The 150 stores targeted for closure account for 25% of Macy’s gross square footage, but less than 10% of sales, chief executive Tony Spring said on a conference call with analysts.
Macy’s has undertaken prior rounds of store closures, but Spring – who took over as CEO this month – said the process was more “stringent” this time, involving interviews with some 60,000 customers who described what they were looking for.
From that process, the company also determined that there was an opportunity to grow the Bloomingdale’s brand, including through smaller stores and more locations away from the US coasts, Spring said.