Macy’s has announced a revised plan to close more stores by the end of 2024 than originally anticipated, reflecting its ongoing “Bold New Chapter” strategy that emphasizes luxury growth and modernization of operations. Chairman and CEO Tony Spring disclosed these changes during a third-quarter investor call.
Earlier reports indicated that Macy’s, which also manages Bloomingdale’s and Bluemercury beauty stores, was planning to close 150 locations by 2026, with around 50 to 55 closures scheduled for 2024. However, Macy’s now intends to shut down approximately 65 locations by the end of next year, with decisions expected to be made post-holiday season.
In conjunction with these closures, Macy’s is investing in upgrading 350 stores, with the first 50 slated for enhancement in 2024. Spring highlighted the success of integrating new luxury brands like SKIMS and Jenni Kayne, as well as improvements to high-end handbags from designers such as Tory Burch and Coach, alongside the launch of Rebag, a preowned luxury accessory initiative.
The company has also been experimenting with small-format stores, which are significantly smaller than traditional Macy’s locations. To date, 24 such stores across the U.S. have opened, along with smaller Bloomingdale’s outlets branded “Bloomie’s.”
In a separate issue, Macy’s faced challenges surrounding financial disclosures after a rogue employee concealed $151 million in delivery expenses over three years. The company’s investigations revealed that this was an attempt to rectify an accounting error rather than theft. Although there was no substantial impact on company finances, it necessitated a revision of past financial statements.
Macy’s third-quarter results revealed decreased profits and sales, attributed to cautious consumer spending and competition, while sales of cold-weather items struggled due to unseasonably warm conditions. Despite these challenges, Macy’s has optimistically adjusted its sales projections for the year, now anticipating revenues between $22.3 billion and $22.5 billion.
Spring expressed encouragement regarding consistent sales growth at the upgraded stores and the robust performance of Bloomingdale’s and Bluemercury. He noted that comparable sales have been trending positively across their stores.
Summary: Macy’s plans to close more stores by 2024 as part of its strategy to focus on luxury growth and modernize its operations. The company continues to upgrade stores and experiment with smaller formats. In light of financial transparency issues related to employee misconduct, Macy’s faces some challenges in profits but remains optimistic about its sales projections and growth in performance at select stores.
The company’s commitment to adapting and modernizing its store experience could signal a positive turnaround in the competitive retail environment, potentially leading to future growth opportunities.