Most of the 100 stores out of Macy’s 728 are anticipated to close early next year and the remainder will cease operations as their leases end or operating covenants are amended or waived. 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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“By closing weaker stores and monetizing some of our real estate where the redevelopment opportunities are significant, we will grow faster and we will produce higher return on invested capital”, Ms. Hoguet said.
“The announcements we are making today represent an advancement in our thinking on the role of the stores, the quality of the shopping experience we will deliver, and how and where we reinvest in our business for growth”, said Macy’s President Jeff Gennette, who will succeed Terry J. Lundgren as CEO early next year. Summer weather helped drive sales of clothing, and Macy’s says it’s seeing results from efforts to add sales staff and revamping its fine jewelry area. Profit is again expected to decline this year.
Still, comparable sales figures were less rosy, with overall sales at stores open at least a year decreasing 1.2 percent from a year ago. Americans have been spending-the Commerce Department said late last month that personal consumption climbed 4.2% in the second quarter, the best rate since late 2014-but what they buy and where they buy it is changing.
Department stores have been struggling with stiff competition from online and off-price retailers. Nonetheless, this was the sixth consecutive quarterly decrease.
The company’s discount stores saw sales increases, with Nordstrom Rack comparable sales up 1.1 percent and Nordstromrack.com/HauteLook up 34.7 percent.
That follows Macy’s move to shutter 40 stores this spring, and comes as Macy’s reported another quarter of falling profits and sales. The Macy’s corporation includes 880 stores in 45 states, the District of Columbia, Guam and Puerto Rico operating under the Macy’s, Bloomingdale’s, Bloomingdale’s Outlet, Macy’s Backstage and Bluemercury monikers as well as the websites associated with them.
Excluding the charges, the company earned 54 cents per share.
Along with a 3.9% decline in revenue, to $5.87 billion, promotional pricing bit into earnings. For example, the company held its first “Black Friday in July” event, which Mr. Lundgren said brought in customers and boosted online sales, though at the expense of the bottom line.
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But the earnings beat Wall Street expectations of 55 cents per share, and met expectations of $3.65 billion in sales, according to a Zacks consensus estimate.
