Macy’s Plans to Close 150 Stores — No One Knows Which Ones Yet
Doomed stores are 25 percent of chain's square footage, contribute 10 percent of sales
By Abigail Nehring February 27, 2024 4:36 pm
reprints
Macy’s needs to shrink its retail footprint by 25 percent to come out stronger on the other side, according to CEO Tony Spring.
The department store announced Tuesday it will close about 150 of its 502 stores over the next three years as part of a bid to regain its market share from competitors. And it plans to shutter the first 50 of them by the end of the current fiscal year.
Spring, who was appointed CEO this month, described the plan in a statement as “a strong call to action” and said it would ultimately improve customers’ shopping experience at the remaining stores.
“It challenges the status quo to create a more modern Macy’s,” Spring said. “We are making the necessary moves to reinvigorate relationships with our customers.”
The underperforming locations represent a quarter of Macy’s gross square footage, but they pull in less than 10 percent of sales, according to the company’s presentation.
Macy’s executives did not disclose the locations of any of the doomed stores, and a spokesperson said the company did not yet have a list to share.
“Closing a store is never an easy decision,” the spokesperson said in a statement, and added that the company would try to relocate staff impacted by the closures to other locations where possible.
It’s a bitter pill the department store chain said it must take. Macy’s reported a loss per share of 26 cents in the fourth quarter of 2023, according to its Tuesday earnings filing. Meanwhile, it reported net sales of $23.1 billion in 2023, down 5.5 percent from 2022.
The company expects to add between $750 million and $1 billion to its bottom line thanks to sales proceeds from closures and subsequent asset gains.
Macy’s plans to use that extra cash to invest in its remaining stores and open new locations for its upmarket subsidiaries Bloomingdale’s and Bluemercury, which both have a smaller retail footprint than Macy’s.
Macy’s stock rose 3.6 percent after the announcement, reaching $20.01 per share by Tuesday afternoon.
While the exact locations of the closures are unclear, about 19 percent of Macy’s retail space is in California, followed by 9 percent in New York and 8 percent in Florida, according to data the company updated on its website Feb. 3.
Abigail Nehring can be reached at anehring@commercialobserver.com.
