Seven months after Macy’s announced it would close 40 stores this past spring, the department store has outlined a plan to “re-create” its portfolio by shuttering 100 additional stores.
Macy’s announced the intention through its second quarter earnings on Thursday, outlining its “move to drive profitable growth and enhance shareholder value.”
“Macy’s is re-creating its physical store footprint to capitalize on Macy’s unique competitive advantage of operating in the most attractive retailing locations in America,” the company said in a statement. “While still maintaining a significant bricks-and-mortar presence in 49 of the top 50 U.S. markets, Macy’s will operate fewer stores and concentrate its financial resources and talent on our better-performing locations to elevate their status as preferred shopping destination.”
Under the plan, Macy’s will close approximately 100 stores out of its 675 full-line stores. Most of the locations will close in early 2017, based on leases.
“In a number of cases, stores will be closed as the value of the real estate exceeds their value to Macy’s as a retail store,” the retailer says.
Macy’s will announce the locations of the soon-to-be closed stores at a later date.
However, the company notes that the stores that will be targeted, while they have positive cash flows today, have been declining steadily in profitability in recent years. The retailer says that some of those sales, about $1 billion, are expected to be retained in nearby stores and online.
“We recognize that these locations do not yield an adequate return on investment and often do not represent a customer shopping experience that reflects our aspirations for the Macy’s brand,” Macy’s president Jeff Gennette said in a statement. “We decided to close a larger number of stores proactively so we can invest in a winning customer experience in our most productive and highest-potential locations, as well as invest in growth sooner and more aggressively in digital and mobile.”
The retailer believes that closing the locations will result in “a more appropriate store portfolio for Macy’s in the longer term and help us to accelerate our progress in building a vibrant omnichannel brand experience.”
Macy’s is no stranger to store closures, as the retailer has announced a string of shutdowns in recent years.
In January, the retailer said that it would close 40 underperforming stores this spring. Before that, in early 2015, the company announced it had closed 14 stores and opened two in a restructuring effort.
by Ashlee Kieler via Consumerist
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