Pandemic Takes Toll
These closures are a part of the wider three-year strategy to close 125 stores by 2023 as it looks to streamline its business and inspire growth. This is in addition to over 100 locations that are already closed in the past few years.
“As previously announced, Macy’s is committed to rightsizing our store fleet by concentrating our existing retail locations in desirable and well-trafficked A and B malls,” a spokeswoman told CNBC in a statement.
“To that end, we announced several store closures today that align to the guidance we provided in February 2020,” she said. “These closures bring us closer to achieving the right mix of mall-based stores.”
Last February, Macy’s announced a plan to shut down 125 stores and cut 2,000 corporate jobs in a bid to slash costs. Four months later, Macy’s announced it laid off 3,900 corporate workers, which represented about 3% of the company’s overall workforce at that time.
The company will switch its business focus from weaker shopping malls toward small-format stores. At that time, CEO Jeff Gennette said Macy’s is undergoing “significant structural changes” that have a goal of slashing costs and reduce duplicative work.
“The changes we are making are deep and impact every area of the business, but they are necessary. I know we will come out of this transition stronger, more agile and better fit to compete in today’s retail environment.”
The list of stores that will be closed this year will be published today. Some locations have already started liquidation sales.
“We continue to believe that the best malls in the country will thrive,” CEO Jeff Gennette told analysts in September. “However, we also know that Macy’s and Bloomingdale’s have high potential [off]-mall and in smaller formats.”
In November, Macy’s reported that net sales for the third quarter plunged to $3.99 billion from $5.17 billion a year earlier. Same-store sales declined more than 20% amid the pandemic.
Macy’s stock closed about 32% in the red in 2020 after hitting all-time lows in April.
Macy’s announced plans to close 45 stores this year as a part of their wider 3-year business strategy that will yield 125 store closures by 2023. In recent years, the company closed over 100 locations as it plans to focus on the best malls and small-format stores.