Macy’s announced on Thursday it will close 100 of its 675 full-line stores across the country in early 2017. In most cases, those locations will be announced closer to the end of the company’s fiscal year in January, the company said in an email.
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Other retailers too have have heavily in e-commerce efforts, while brick and mortar stores had resorted to sharp discounting that temporarily lifted sales but hurt profits.
The closure of Macy’s could prove to be a blow for affiliated malls, many of which rely on the department store as an “anchor” tenant.
For its stores that will stay in business, Macy’s said it will invest in improvements.
– This summer Penney has been opening kitchen and laundry appliance departments in its stores and testing other partnerships with Ashley Furniture and flooring company Empire Today. Sales fell 3.9 percent to $5.8 billion.
Macy’s and Kohl’s also ended their quarters with lower inventory.
A spokesperson for the retailer, Elina Kazan, says “Unfortunately, we can not confirm any stores at this time as the affected stores are still being determined by the company, and will be finalized and announced by the end of the fiscal year”. It added the move “will result in a more appropriate store portfolio for Macy’s in the longer term and help us to accelerate our progress in building a vibrant omnichannel brand experience”. It’s also looking at Herald Square in New York, State Street in Chicago and downtown Minneapolis, Hoguet told analysts. “We monitor stores all the time, but there are no stores that we would anticipate closing next year right now”. They’re also shopping on Amazon.com, where apparel sales grew by $1.4 billion in the first quarter, according to The Wall Street Journal.
The closures are likely to lead to the loss of thousands of jobs and create large vacancies at malls, which lead to less foot traffic and fewer sales for the remaining smaller stores.
The company posted earnings of $11 million, or 3 cents per share, compared with $217 million, or 64 cents, made in the second quarter of 2015 because of the cost associated with store closings.
Excluding the impact of earlier store closings and other items, Macy’s per-share earnings were 54 cents, down from 94 cents in the same quarter a year earlier.
Department stores trying to recapture their appeal to consumers are making plans to provide more experiences like spas and restaurants, and offer exclusive selections to transforms the store into more of a destination.
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It’s unclear whether the closures will impact any of Macy’s stores in Tennessee. The stock jumped 17.1 percent to close at $39.81.
