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Macy’s to close up to 40 stores
The retailer said although physical stores are vital to its omnichannel strategy, it must shut down stores that are lagging in sales.
Cincinnati--Early next year, Macy’s Inc. will close 35 to 40 underperforming stores, which represents about 5 percent of the total number of Macy’s stores.
While the exact locations will be announced at a later date, Macy’s said Tuesday the stores that’ll be closing have annual sales of $300 million, excluding sales expected to be retained in nearby stores and online.
The closings are taking place as it works to optimize its omnichannel approach to customers shopping across America.
“Physical stores remain absolutely vital to our omnichannel strategy,” said Macy’s CEO and Chairman Terry Lundgren. “As new shopping centers are opened, however, many customers change their shopping habits and often the sales volume of a store gets divided among the new and nearby, existing centers. Each year, we prune some stores that are our weakest performers so that we can concentrate our resources on the best locations and maintain a strong physical presence.”
He added that Macy’s opens a small number of new stores every year to fill in gaps in market coverage or take advantage of real estate opportunities.
As part of its omnichannel strategy, Macy’s also now offers same-day delivery for purchases made online in 17 cities, and has grown its digital offering to include apps and mobile-enhanced websites. Allowing customers to shop wherever, whenever and however they choose enables the retailer to “attract new customers and grow sales profitably,” Lundgren said.
“While making the decision to close stores is difficult, we know it is necessary for us to remain competitive as customer shopping patterns continue to change,” he said.
Macy’s is far from the only major chain retailer in the country that is closing stores.
AboutMoney’s list of U.S. retail chains’ store closings and downsizing plans for 2015 included jewelry-selling stores Sears (closing 77 stores), J.C. Penney (closing 40) and Walmart (2).
Other retailers on the list were Walgreens (200), Staples (55) and Gap/Gap Kids (35 stores by 2016).
Macy’s said its upcoming store closings will be communicated directly with employees in those locations prior to a public announcement, with the retailer adding that associates displaced by closings may be offered positions in nearby stores where possible. Severance benefits will be given to all eligible full- and part-time associates who are laid off due to a closing.
The retailer currently operates 770 Macy’s stores. In the past five years, the retailer has closed 52
Macy’s stores and opened 12--equaling a net loss of 40 stores--and said it plans to open six of its new Backstage off-price locations this fall.
RELATED CONTENT: Macy’s gets into the off-price business
Overall, Macy’s Inc. operates about 885 stores in 45 states, the District of Columbia, Guam and Puerto Rico under the Macy’s, Bloomingdale’s, Bloomingdale’s Outlet and Bluemercury names, as well as macys.com, bloomingdales.com and bluemercury.com. There’s also a Bloomingdale’s in Dubai, operated by Al Tayer Group LLC under a license agreement.
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