Macy’s says it plans to close about 100 stores next year as the department store operator aims to become more nimble in a competitive market.
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Locations of those stores will be announced at a later date, the company said.
Macy’s did not identify any of the 100 stores on its preliminary list of closures, but it did provide some insight on the process that identified candidates.
Macy’s said an announcement on which stores would close will be made later in the year.
The company said it recognizes that those locations aren’t yielding an adequate return on investment, and that they often “do not represent a customer shopping experience that reflects our aspirations for the Macy’s brand”.
This newest wave of closures is the biggest yet, wiping out about 15 percent of existing Macy’s stores.
“We have a large portfolio of stores, 728 locations nationwide”, she said.
It also said it’ll close 100 stores early next year on top of the 40 it closed this spring. The company favors stores that benefit from tourism and are in or near a metropolitan area, she said.
Macy’s now runs 728 stores and will slash that number substantially in order to stay afloat.
Total sales fell almost 4 percent to $5.87 billion in the second quarter after falling 7.4 percent in the first quarter. That represents close to 14 percent of its store base. The company has eight stores in CT, including one in Waterbury’s Brass Mill Center Mall. While the move makes sense from Macy’s perspective, “it’s a death sentence for the mall and all the other retailers associated”, particularly at smaller shopping centers, he said.
Macys now operates 728 stores, including 675 full-line locations.
Shutting down less-profitable stores will let Macy’s focus on improving its top stores and growing online sales, she said. It opened six off-price Macy’s Backstage stores in 2015 and is also expanding the footprint for its Bluemercury beauty chain. At the same time, department stores lost an estimated $348 million dollars in apparel revenue in the first quarter.
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Sales in the second quarter totaled $5.866 billion, a decrease of 3.9 percent, compared with sales of $6.104 billion in the same period previous year. The company also beat earnings estimates for 48 cents a share – excluding certain one-time costs, it earned 54 cents a share. Amazon is reportedly poised to surpass Macy’s as the largest online clothing seller next year, the AP said.
