Macy’s has announced that it will be closing more stores than initially projected earlier this year. Based on its third quarter earnings report, the retail giant now anticipates shutting down 65 locations by the end of 2023, an increase from the original estimate of 50 closures shared in February.
Macy’s CEO, Tony Spring, acknowledged the decision during an earnings call, stating that the closures would occur after the holiday season. In February, the company had shared plans to reduce its store footprint by closing a total of 150 “unproductive” stores by 2026, which represents approximately 30% of its locations. The company aims to shift its focus to 350 “go-forward” stores to enhance customer experiences and streamline operations.
Despite the store closures, Macy’s has ambitious plans for growth in its luxury brands, Bloomingdale’s and Bluemercury. The company intends to expand these brands with an addition of 45 new locations over the next three years, including 15 Bloomingdale’s outlets and at least 30 Bluemercury stores, while also remodeling 30 existing Bluemercury locations. So far in 2023, Macy’s has opened nine new Bluemercury establishments and remodeled five others.
Additionally, Macy’s addressed concerns regarding a recent incident involving an employee who allegedly concealed $151 million in delivery expenses over nearly three years. Following an independent investigation, the company concluded that this misconduct had no significant impact on its financial results, as it had recorded approximately $4.36 billion in delivery expenses during the period in question.
The closure of stores paired with the expansion of luxury brands illustrates Macy’s strategic pivot toward more lucrative market segments while addressing operational inefficiencies. This approach may ultimately strengthen the company’s market position and enhance customer engagement.
In summary, Macy’s plans to close more stores as part of its ongoing restructuring strategy, while also making significant investments in luxury brands. This dual approach could pave the way for a revitalized and modernized Macy’s that better meets consumer expectations and market demands in the future. This move not only showcases the company’s adaptability but also presents opportunities for growth in emerging sectors.