The new strategy seeks to return the 166-year-old company to growth, in which it would close 150 “underperforming” stores, the company said in a statement.
The group, owner of the famous department store of the same name, announced in January that it would reduce its workforce by 3.5%. According to its annual report, it employed about 94,500 people and had 722 stores at the end of 2022.
About 50 of the 150 stores will close at the end of the current fiscal year, the company said, without detailing how many employees would be affected.
The plan comes a week after investment firm Arkhouse Management proposed replacing nine members of Macy’s board of directors and after the rejection in January of a purchase offer from Arkhouse and Brigade Capital Management.
Macy’s announced that it will focus its investment on some 350 stores and the expansion of small-sized stores.
Luxury brands Bloomingdale’s and Bluemercury have shown “best performance among those in the Macy’s, Inc. portfolio,” according to the company.
As part of its strategy, the company plans to open in new and existing markets “approximately 15 Bloomingdale’s stores, at least 30 new Bluemercury stores and around 30 remodelings” of this cosmetics business, in the next three years.
The company also published its final 2023 results this Tuesday, in which it recorded a decrease in its revenue and profits.
Revenue was $23.1 billion, down 5.5% from a year earlier, while net profits were $105 million, a sharp drop of 91%.
Department stores have seen difficulties for years in a market in which consumers increasingly migrate to online sales and have been forced to reduce their size, a dynamic accentuated by the covid pandemic.
These trends have put pressure on shopping centers across the United States, especially older department store chains that have lost followers.
The 150 stores that Macy’s plans to close correspond to 25% of the brand’s gross square meters, but less than 10% of sales, Tony Spring, the group’s executive director, said in a conference call.
Macy’s has closed stores in the past, but Spring, who took over as CEO this month, said the process was more “rigorous” this time, with interviews with about 60,000 customers who described what they were looking for.
Through that process, the company also determined that there were growth opportunities with the Bloomingdale’s brand through smaller stores and in locations away from the coast, Spring said.
Macy’s is also working on a pilot program to test new ideas in 50 stores.
These stores will be “emblematic of what the future of the Macy’s brand will be, and that is a greater variety of products, a more powerful visual presentation, more personal in areas such as women’s footwear and casual clothing,” the manager said.
Source: With information from AFP.
