Walmart is slated to close 154 US stores this year and just announced a $3 billion deal to purchase Jet.com as it looks to improve its online retail presence.
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It is unclear, at this time, however which stores will close. Most of these stores will close early in 2017, with the balance closing as leases and certain operating covenants expire or are amended or waived. Macy’s now operates 728 stores, nine of which are in North Carolina, according to its website.
The Meier & Frank Building has housed a department store since it opened 117 years ago, but Thursday’s announcement makes the store’s future appear even more uncertain.
Macy’s has been in a rough patch recently, delivering six consecutive quarters of sales declines at its stores open more than a year.
Total sales fell almost 4 per cent to US$5.87 billion in the second quarter after falling 7.4 per cent in the first quarter. “In the short term, our company’s topline sales will be somewhat smaller”, Macy’s President Jeff Gennette said in a news release.
That represents close to 14 percent of its store base.
Department stores have had a rough few years as competition from online and off-price retailers intensifies and consumers spend a larger part of their income on big-ticket items such as electronics and cars than on clothes.
The company, which operates Bloomingdale’s stores as well, said it also would increase its exclusive products and would prioritize its investments in the stores that offer the highest growth potential.
Lundgren said in the statement that Macy’s first-ever “Black Friday in July” promotional event drove sales and that normal weather patterns helped the retailer’s apparel business. Comparable sales on an owned plus licensed basis were down by 2 percent and 2.6 percent on an owned basis.
Net income totaled $11 million, or 3 cents per share, down from $217 million, or 64 cents per share, for the same period past year. Most of the closures are expected in early 2017. Analysts had been expecting earnings of 48 cents per share on $5.77 billion in sales.
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Macy’s also continues to look for opportunities to unlock value from its real estate portfolio, particularly at flagship locations in cities, a move it’s faced pressure to do for the past year.
