Macy’s Also disclosed that there is no cause for alarm by the employees of yet to be shut stores, because they will be absorbed into the nearby performing Macy’s stores. But Macy’s appears to be taking seriously pressure from some of its investors to begin selling its stores, which are themselves valuable but may sit on even more valuable real estate.
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To combat online sale events like Amazon’s Prime Day, Macy’s joined other department stores in running a Christmas in July promotion to entice shoppers.
The move comes as Macy’s revealed its second-quarter sales fell less than feared.
Overall, Penney’s numbers came in better-than-expected with lower expenses, said retail analyst Dana Telsey on CNBC this morning. Macy’s also said it still expects earnings to be in the range of $3.15 to $3.40 for the year.
The company said Thursday it is launching a new strategy to re-create its store portfolio, resulting in a reduction of about 14 percent of its stores.
Macy’s Inc. said Thursday that it will close about 100 of its full-line stores next year – some 15% of its full-line store base – as the struggling retailer grapples with rapid changes in people’s buying habits.
United States department stores have been suffering from a drop in footfall at the nation’s malls and from increasing competition from online giants such as Amazon.
Macy’s issued a press release detailing its plans for the immediate future, and despite the closures, it remains confident that such measures will only aid the business. It also opened six discount Backstage stores and bought upscale beauty-shop chain Bluemercury in 2015.
The Macy’s at the Ohio Valley Mall operated as Kaufmann’s from 1979 until a 2005 corporate merger led the company to change the store’s name. That’s down about 23 percent from a peak in January 2007 of 868 stores including Bloomingdale’s.
Macy’s closures represent $1 billion in sales that will be up for grabs by its competitors. Macy’s officials said the locations of the 100 stores closing will be announced at a later date. The company has not specified which locations, but said it will still have a presence in virtually all major markets.
The Macy’s Herald Square flagship department store is seen here in New York, Aug. 9, 2016.
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The retail chain’s profit has dropped to $11 million in its second quarter from a whopping $217 million during the same quarter of the previous year. Excluding the impact of store closings and other items, Macy’s per-share earnings were 54 cents, down from 94 cents in the same quarter a year earlier but still much better than analysts had expected.
