Macy’s will close 100 of its 728 stores by early 2017 in a bid to focus on improving its high-volume locations and boosting online sales, the retailer announced on Thursday.
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The Cincinnati-based company said the locations of the closed stores would be announced at a later date.
Macy’s Inc. reported their second quarter 2016 financial results this morning, and was able to post a beat on both earnings and revenue estimates.
Macy’s reported a profit of $11 billion for the quarter ended July 30, down from $217 million in the year-ago period.
Sales in the second quarter totaled $5.866 billion, a decrease of 3.9 percent, compared with sales of $6.104 billion in the same period a year ago. Excluding charges related to store closings, the company earned 51 cents, which is above the 48 cent estimate from FactSet.
In addition, malls that lose a Macy’s might find it tough to replace the store as an anchor tenant, and that could hurt sales for other retailers in such malls, Church said. Annual net sales at the stores Macy’s plans to shutter were estimated at about $1 billion.
Many US premium brands have announced their intention this week to reduce their exposure to department stores and opt out of the nearly endless discounting which has conditioned the customer to being unwilling to pay full price.
In trading Thursday, Macy’s stock closed at $39.81, up 17.09%.
The move will bring down the number of Macy’s stores in the U.S.to 628. Analysts polled by research firm Consensus Metrix had expected a 4.6 percent drop.
Macy’s will close 100 department stores due to declining sales.
Shares of Kohl’s were almost 12% higher in mid-morning trade Thursday. Revenue at stores open at least a year, including licensed businesses like beauty, were down 2 percent in the second quarter.
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.
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Macy’s ranks as Arizona’s 41st largest non-government employer with 3,700 employees in this year’s Republic 100 report.
