The venerable department store operator also reported better-than-expected second-quarter profit and revenue, raising hopes that the struggling sector may be turning a corner. “By closing 100 stores… we’re getting out in front of this”.
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The changing business model used by Macy’s prompted the company to close the Roseburg store, and Gagnon said shoppers and others in Lane County should be anxious Macy’s will close the Eugene store, too.
Numerous stores will close in early 2017, with the balance closing as leases or other agreements expire or are amended.
Sales fell -1.2%, but that was less than analysts expectations of a -2.6% drop. However, the results beat Wall Street estimates, and shares rose $4.95, or more than 14 percent, to $38.95, in early trading. But the size of this newest consolidation and the fact Macy’s says that almost all of the to-be-closed stores are now profitable, suggests MI might not emerge unscathed this time.
Macy’s will add new vendor shops in stores and create new in-store events and experiences.
“We operate in a fast-changing world, and our company is moving forward decisively to build further on Macy’s heritage as a preferred shopping destination for fashion, quality, value and convenience”.
Macy’s plans to close about 100 stores nationwide in response to a trend of declining sales. Associates displaced by store closings might be offered positions in nearby stores where possible, the company said.
All of the MI stores dodged the last round of closures early this year. Just this week, Walmart inked a $3.3 billion deal to acquire Amazon rival Jet.com.
Shutting down less-profitable stores will let Macy’s focus on improving its top stores and growing online sales, she said. The other two anchor stores at the Lima Mall are JCPenneys and Sears. And the changes affect everything from the experience on the store floor to who’s sitting in the most executive office.
Macy’s isn’t the only store at the mall having a hard time surviving against online retail sales, Manning said. Those malls impacted risk losing a major source of revenue and a suffering a traffic slowdown in traffic that is likely to hurt other stores.
“As far as the department-store sector goes, it’s a shrinking sector”, said Howard Davidowitz, chairman of Davidowitz & Associates, a retail consulting and investment banking firm headquartered in NY.
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Neil Saunders, CEO of research firm Conlumino, said the Macy’s move was “sensible”, but largely the result of a “self-inflicted defeat”.
