The company, which also operates Bloomingdale’s stores, said it would increase its exclusive products and would prioritize its investments in the stores that offer the highest growth potential.
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With sales declining at many brick and mortar stores, Macy’s – along with other major retailers – have to re-think their business models.
Macy’s reported Thursday that profits and sales fell in the second-quarter. Sales of cold-weather items have been particularly icy.
Macy’s shares closed up 17 percent at $39.83.
Macy’s announced on Thursday that it will close 100 of its 650 stores nationwide.
Macy’s had been a strong performer since the recession, but the company has seen sales slow as it grapples with competition and changing shopping patterns.
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. In addition, six Macy’s Backstage outlet stores opened in fall 2015. But since this past May, it announced it has to accelerate its efforts to get shoppers excited. The company said in a news release today it is in negotiations to sell its men’s store on Union Square in San Francisco. Macy’s will give more attention to its “online shopping and mobile apps”, and focus its resources on its highest-performing stores.
Last November Macy’s said it would seek partners to redevelop the Minneapolis real estate and the other flagship locations to add other uses to the retail operations.
A sign that marks the Macy’s store is seen at the Herald Square location in NY on May 9, 2016.
The company said it earned $11 million, or 3 cents per share, in the quarter ended July 30. The retail sector and department stores in particular have seen their fair share of struggles in recent months, despite a recovering US economy and seemingly growing consumer spending levels, so investors were greatly anticipating these earnings reports to see the state of the two companies.
The department store operator posted revenue of $5.87 billion in the period, also topping Street forecasts. Analysts had expected earnings of 45 cents a share on $5.75 billion in revenue, according to a consensus estimate from Thomson Reuters.
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Furthermore, Macy’s reported that same-store sales decreased by 2% when compared to past year, but that was better than the 4.4% drop analysts were forecasting. In the first quarter, the company reported a 0.4 percent dip in in that measure, reversing five straight quarters of growth.
