“We are encouraged by the fact that Macy’s sees this move as part of a wider program to reinvent itself and will direct the savings from shuttered stores into its remaining locations”, Neil Saunders, CEO of retail research firm Conlumino, wrote in a note Thursday. This represented a reaction to weak customer traffic and sales throughout 2015.
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“Macy’s is committed to treating associates affected by store closings with respect and openness”, the company said.
Macy’s Inc. plans to close about 100 stores next year as the department store operator aims to become more nimble in a competitive market, the retailer said Thursday. Image source: The Motley Fool. “So, that was good company to be in”.
Macy’s shares closed up 17 percent at $39.83.
The retailer said on Thursday as it announced its earnings that it would shutter 100 stores, mostly at the beginning of next year.
Wall Street has also been closely watching as Macy’s explores potential spin-offs of its lucrative real estate portfolio.
“They have a lot of work they need to do … like making the stores more relevant to a millennial consumer and the stores are now not there”, he said.
All of the stores that are set for closure have a positive cash flow, Gennette said, although their volume and profitability have been declining steadily.
Given the frothy state of the San Francisco real estate market right now, this building is probably worth hundreds of millions of dollars. The stores Macy’s will close will be announced at a later date, but could include many that act as mall anchors.
TJX will continue to benefit from rivals’ sales declines.
Quarterly sales at Macy’s have slipped in the past 18 months. The ones that will be shut down are full-line stores, and they generate roughly $1 billion in annual sales, or 4 percent of Macy’s total sales.
In the past couple of years, TJX has shown itself to be adept at capitalizing on department stores’ woes.
In the first quarter of this year, when sales plummeted even faster at Macy’s and almost all of its department store peers, sales growth for TJX’s domestic business segments accelerated to 9.3%. In stores that stay open, Macy’s plans to add new vendors and increased staffing.
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Stuart Appelbaum, president of the Retail, Wholesale and Department Store Union, which represents some of Macys workers, said, Its essential for Macys to invest in their people and in their stores in order to create an atmosphere that customers want to experience.. Macys, Kohls, J. C. Penney and Nordstrom have all struggled to adapt to consumers changing shopping patterns, which have increasingly favored discount stores and online retailers.
