Macy’s, one of the most iconic department store chains in the US, said it was accelerating store closures after it announced it would close around 65 locations by the end of January 2025, part of a broader strategy labeled “Bold New Chapter” to refresh the brand and focus resources on more profitable operations. These closures are part of the wider struggles that have hit the retail industry because of changing consumer shopping habits and pressure from online retailers.
Reason for the closures
On its third-quarter earnings call recently, CEO Tony Spring said the decision to shutter more than the previously estimated 50 stores relates to the needs of the company to right-size operations and concentrate its resources on locations that would be more economically viable. These moves are part of the effort to shut underperforming stores that have not been able to attract consumers in the increasingly digital way of shopping. Spring emphasized these closures as a necessary part in changing Macy’s into something more profitable: “These are places where the economics are not as favorable” and where customer traffic has diminished significantly.
That strategic reboot includes the aim of closing a total of 150 locations by 2026. This decision reflects the larger trends within retail, as many brick-and-mortar stores struggle in an environment of shifting consumer preference for online shopping. To that point, it’s also reported that more than 7,100 store closures have been announced across U.S. retailers in 2024 alone-a staggering indicator of a wider trend to reduce physical retail footprints.
Impact on locations and employment
While it has not been indicated which stores will be closed, for certain such closures will affect different parts of the country. The store closures, the company has indicated, will occur after the holiday season, which will permit one last hurrah during one of the busiest shopping times of the year. It is all about timing, and Macy’s is trying to squeeze out all sales possible before it downsizes.
Apart from the store closures, Macy’s faced other operational challenges that saw an internal investigation into an employee who was accused of camouflaging up to $154 million in delivery expenses over several years. This incident has not only delayed financial reporting but also raised questions about internal controls within the company.
As part of restructuring, Macy’s has already cut more than 2,300 jobs this year and closed five stores to put the resources toward improving customer experience and operational efficiency. The company would open new locations for other brands, Bloomingdale’s and Bluemercury, which have shown growth potential in the retail downturn.
Future plans for change and growth
Despite the hardships of store closures, Macy’s doesn’t solely downsize; at the same time, the retail company invests into upgrades of the existing locations, adding to the choice within. Macy’s is supposed to remodel around 350 stores in the upcoming years, with a pilot project for 50 anchor ones that already started and provided great sales increases.
New strategy at Macy’s has been introducing new luxury brands, such as SKIMS and Jennie Kayne into product assortment, which resonated with consumers. Increase in luxury should drive a more affluent consumer and improve profitability overall.
In addition to renovating stores, Macy’s renews the development of digital capabilities in order to keep up with online retail giants. Macy’s blends online-offline retail experiences in its attempt to match customer expectations for seamlessness as a way of meeting modern customer needs.
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