Macy’s has announced an increase in its store closures, planning to shutter 65 locations by the end of this fiscal year, up from an earlier estimate of 50. This decision is part of the company’s broader strategy to eliminate around 150 underperforming stores over the next three years. The news was revealed during Macy’s third-quarter earnings call, where CEO Tony Spring stated, “In line with our typical cadence, closures will occur post-holiday.”
The company had faced delays in reporting its quarterly earnings due to a significant accounting issue involving an employee who concealed up to $151 million in expenses linked to small package deliveries. An independent investigation found that a single employee had manipulated accounting entries and fabricated related documents. Adrian Mitchel, Macy’s COO and CFO, clarified that this was not a case of theft, emphasizing there was no effect on revenues, cash, or inventories, as all vendors were compensated.
In light of these challenges, Macy’s is revamping its financial reporting controls. The broader retail sector is also experiencing difficulties, with over 7,100 store closures announced across U.S. retailers by the end of November 2024—a staggering 69% increase compared to last year. Additionally, 45 retailers have sought bankruptcy protection in 2024, double from the previous year.
In a bid to pivot towards growth, Macy’s is optimistic about its other brands, Bloomingdale’s and Bluemercury. The company plans to open 15 Bloomingdale’s stores and 30 Bluemercury locations over the next three years, alongside remodeling about 30 existing Bluemercury stores. Despite the challenges, this expansion strategy hints at Macy’s resilience and adaptability within a shifting retail landscape, even as its stock has fallen approximately 20% over the last year.
Overall, while the retail sector is facing significant hurdles, Macy’s commitment to innovation and restructuring offers a hopeful outlook for its future. The company is aiming to not just survive the current wave of change but to thrive by leveraging its strong brand portfolio.