Annual revenue at the stores Macy’s plans to shutter were estimated at about $1 billion.
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The move follows on from the iconic brand’s latest earnings report, and will affect around 15 per cent of its 675 full-line locations.
Macy’s, Kohl’s, and Ralph Lauren all reported higher than expected quarterly earnings in the morning despite lower sales.
The company said it will first communicate its store closing decisions directly with the employees of those respective stores before a public announcement is made.
Over the past six years, Macy’s has closed roughly 90 stores and opened 13 new ones, along with six new Macy’s Backstage off-price outlets that opened in 2015.
Gennette said they are closing a large number of stores “proactively” to better invest in the most profitable and “highest-potential locations”.
Macy’s did not reveal the location of the stores which would be shuttered but it is believed the closures will take place in early 2017 following the holiday and post-holiday clearance trading periods.
Chairman and chief executive officer Terry J. Lundgren said: “We are encouraged by the distinct improvement in our sales and earnings trend in the second quarter”. The company said it continues to “analyze possibilities” of bringing in alternative tenants into its flagship Herald Square location in Manhattan as well as the downtown stores in Chicago and Minneapolis.
Macy’s sales fell almost 4.0 percent during the second quarter, it said on Thursday, but that was better than analysts had expected and helped to send its shares and those of other department stores higher.
Many of Macy’s branded stores are dubbed “anchors” that helped attract shoppers to malls.
In its second quarter, which ended July 30, Macy’s said its profits plunged to $11 million, or 3 cents a share.
WCPO Insiders will learn why those Macy’s stores are the most vulnerable to closure.
Macy’s still is considering options for the upper floors of the State Street store, Hoguet said. Excluding charges related to store closings, the company earned 51 cents, which is above the 48 cent estimate from FactSet.
Revenue fell to $5.87bn from $6.10bn, which was ahead of estimates of $5.77bn.
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The closures are generally seen as a good idea by analysts who follow the company, because they’ll allow the company to focus more on digital investments and improving the better-performing stores.
