Macy’s has announced plans to close more stores than initially expected by the end of 2024, as part of its ongoing “Bold New Chapter” strategy, which emphasizes luxury growth and modernization. During a third-quarter investor call, Chairman and CEO Tony Spring revealed that the retailer now anticipates closing about 65 locations by the end of 2024, in comparison to the previously estimated 50 to 55 closures.
In line with these closures, Macy’s is also upgrading 350 of its stores, starting with 50 slated for enhancements in 2024. The retailer is shifting its focus towards luxury brands, citing the success of new partnerships with brands like SKIMS and Jenni Kayne, along with a revitalization of its designer handbag offerings. This strategic redirection aims to cater to a more affluent customer base.
The company has also embraced smaller-format stores, with 24 newly opened locations across the U.S., particularly in the Chicago area, which offer a more accessible shopping experience in strip malls instead of traditional large malls. Additionally, smaller Bloomingdale’s stores, branded as “Bloomie’s,” are part of this expansion model.
Amid these changes, Macy’s experienced a delay in releasing its third-quarter earnings due to a schema involving a former employee who concealed $151 million in delivery expenses over nearly three years. This incident, while serious, was determined not to have a material impact on the company’s overall finances, although it required a revision of previous financial statements.
Despite facing challenges such as cautious consumer spending and increased competition, Macy’s raised its sales forecast for the year while revising down profit expectations. The company noted that comparable sales show promise, especially in the upgraded store formats, where they have implemented innovative tactics to enhance the shopping experience.
While the recent warm weather has affected sales of cold weather items ahead of the holiday season, Spring expressed optimism about the positive performance in certain segments. The company’s projected sales range for the year suggests growth opportunities, reinforcing its commitment to adapt and innovate in a changing retail landscape.
Overall, while there are challenges ahead for Macy’s, the company’s strategic pivot toward luxury and its focus on smaller, more accessible stores may position it well for future success in a competitive market.