The stock was up 16.9 percent, to $39.75, in early afternoon trading. They represent about 15% of all Macy’s department stores.
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Macy’s had been a strong performer since the recession, but the company has seen sales slow as it grapples with competition and changing shopping patterns. Macy’s employment tally was roughly the same as a year ago. It opened six off-price Macy’s Backstage stores in 2015 and is also expanding the footprint for its Bluemercury beauty chain. The announcement of the closure came as a shock to Roseburg shoppers and was called a “tragic” loss for the mall.
The company lists seven Macy’s stores in the Baltimore region on its website.
At its peak in January 2007, the chain had 868 stores, including locations under the Bloomingdale’s brand, the AP reported.
The locations of the stores to be shuttered will be announced at a later date, the Cincinnati-based retailer said today in a news release.
The company said it was sticking to its outlook.
The retailer is selling its highly successful men’s store in Union Square, San Francisco, with plans to reinvest the valuable real-estate proceeds in other parts of the company, such as beefing up its digital bona fides.
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.
The latest quarter included charges of $255 million, or 51 cents per share, mainly related to the upcoming store closures. The number could be 200 employees a store or, by another calculation, a percentage drop of Macy’s total employee pool of just over 150,000 workers.
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.
Macy’s President Jeff Gennette, who is to become CEO next year, said the locations to be closed have seen declining profit in recent years.
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. That’s the sixth straight decline for that measure. The stock has fallen 50 percent in the last 12 months.
The company said it was sticking to its outlook.
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“Customers almost everywhere in America will have easy access to Macy’s stores, with the additional convenience and increased functionality of our dynamic digital offering”, Macy’s President Jeff Gennette said in the press release. Macy’s also “reaffirmed” its full-year guidance of $3.15 to $3.40.
