Macy’s plans to close more stores than initially anticipated by the end of 2024 as part of its “Bold New Chapter” initiative, which emphasizes luxury growth and modernizing operations. During a recent third-quarter investor call, Chairman and CEO Tony Spring revealed that the company now expects to close about 65 stores by the end of 2024, an increase from the previous estimate of 50 to 55 closures. This aligns with the company’s strategy to enhance its focus on luxury brands and upgrade its retail spaces.
Macy’s earlier announcement included plans to shut down approximately 150 stores industry-wide by 2026, while simultaneously upgrading around 350 locations, starting with the first 50 in 2024. Notable luxury brands like SKIMS and Jenni Kayne have been successfully introduced into its stores, with improvements also seen in the designer handbag sector.
In addition to the closures, Macy’s has opened a series of “small-format” stores primarily located in strip malls and shopping centers, which are about one-fifth the size of traditional locations. As of now, 24 of these smaller stores are operational across the U.S., along with new Bloomingdale’s “Bloomie’s” boutiques.
In a separate development, Macy’s delayed the release of its third-quarter earnings due to an internal investigation into a former employee who concealed $151 million in delivery expenses over nearly three years. Although Macy’s financial statements required revisions, the company asserts that this incident will not materially affect its finances.
The retailer reported falling profits and sales amidst cautious consumer spending and competition. Despite this, Macy’s has raised its sales forecast for the year, now estimating between $22.3 billion and $22.5 billion, while adjusting its profit projections downwards. Encouragingly, the company has seen positive trends in its First 50 upgraded locations and is optimistic about future growth.
In summary, while Macy’s faces challenges with store closures and financial adjustments, the company’s shift toward luxury and modernization indicates a proactive approach to adapt to the changing retail landscape. As they navigate these difficult transitions, there remains an opportunity for growth and revitalization in their offerings. This spirit of adaptation can indeed be seen as a hopeful sign for both the retailer and its customers.