Macy’s will cut 150 stores over the next three years and move its focus on luxury sales in an effort to turn the historic retailer around.
In a news release, Macy’s summed up its changes by calling the package of changes “A Bold New Chapter.”
“A Bold New Chapter serves as a strong call to action. It challenges the status quo to create a more modern Macy’s, Inc. We are making the necessary moves to reinvigorate relationships with our customers through improved shopping experiences, relevant assortments and compelling value,” Macy’s CEO Tony Spring said.
The release said Macy’s will close “150 underproductive locations, including approximately 50 by the end of the fiscal year.”
The release said expansion beyond the 350 stores remaining will focus on “small-format stores.”
A Macy’s representative would not name the locations where stores are closing, according to NBC.
The locations being closed account for about 25 percent of Macy’s square footage but only 10 percent of sales, according to The New York Times.
“We have to focus on having the best stores, not the largest number of stores,” Spring said on a Tuesday call.
The company projects selling these stores and some warehouse locations will bring in $600 million to $750 million in revenue.
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The Macy’s releases said that Bloomingdale’s and Bluemercury, a health and beauty chain “have been outperformers within the Macy’s, Inc. portfolio” and will be expanding.
Macy’s will add about 15 Bloomingdale’s stores and at least 30 Bluemercury stores, while remodeling another 30 Bluemercury stores over the next three years.
David Swartz, a retail analyst at Morningstar, offered a mixed view on the changes, according to the Times.
“There’s less competition there, but the problem is that it’s not clear that the luxury department store really has a great future,” he said. “A lot of luxury labels are doing their own direct selling.”
Smaller market Bloomingdale’s stores and outlet stores will be opening, Spring said on the Tuesday call.
“It makes sense for Macy’s to open up stores in those smaller locations, but is it too late?” Swartz said. “There’s already other companies doing the same thing.”
Elsewhere in its release, Macy’s said it would “improve both relevance and value” of the products offered and modernize “the shopping environment to facilitate a convenient, easy, and frictionless customer experience across channels with continued focus on digital excellence.”
“Macy’s just hasn’t put its best foot forward for the consumer, so consumers have abandoned it and shopped elsewhere,” said Neil Saunders, managing director of the research firm GlobalData, the Times reported. “This is a bit of a turning point for Macy’s.”
In January, Macy’s announced that it would close five stores and cut about 2,350 jobs, according to Fox Business.
