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Macy’s to Shutter 35 to 40 Stores Next Year
In the ever-changing world of retail, Macy’s Inc. is tweaking its store lineup with plans to cut 35 to 40 stores from its fleet of 770 Macy’s outlets early next year.
Macy’s Chairman and Chief Executive Terry Lundgren said the department-store chain had not yet decided which stores would be axed until the company completes an analysis of its stores and their sales.
The company said that employees displaced by the store closings may be offered positions in nearby stores, if possible, or offered severance benefits.
“Physical stores remain absolutely vital to our omni-channel strategy, which provides local touch points and tailored merchandise assortments for shoppers in nearly every major market,” Lundgren said. “As new shopping centers are opened, however, many customers change their shopping habits and often the sales volume of a store gets divided among the new and nearby existing centers. Each year, we prune some stores that are our weakest performers so that we can concentrate our resources on the best locations and maintain a strong physical presence. At the same time, we open a small number of new stores to fill gaps in our market coverage or where we have outstanding real estate opportunities.”
Lundgren pointed out that between 2010 and 2015, some 52 Macy’s stores were closed and 12 new Macy’s stores were opened. Also, this fall, the retailer is building on a new venture by opening six new discount stores called Macy’s Backstage.
As consumers switch their shopping habits to more online excursions, retailers with bricks-and-mortar stores have had to adjust.
Meanwhile, Macy’s announced that it had signed an agreement with Best Buy, a major electronics retailer, to test licensed consumer electronics departments in 10 of its stores. The test stores will open in early November.
The shops will be about 300 square feet and be located in various locations around the country. The shops will be staffed by Best Buy employees and feature Samsung smartphones, tablets and smart watches as well as audio devices and accessories from Samsung and other brands.
“We are delighted that consumer electronics will be returning to selected Macy’s stores through this test, which will allow us to learn how we can best serve our customers’ needs in this very sophisticated category. Our customers have expressed interest in electronics for self-purchase and gift giving, and this collaboration with Best Buy reinforces Macy’s as a shopping destination throughout the year for the products that are most in demand,” said Jeff Gennette, Macy’s president. “We will test and learn, along with Best Buy, through the holidays and into 2016 before deciding on next steps.”
Macy’s Inc., which includes the Bloomingdale’s nameplate, had a profit of $1.5 billion on $28 billion in revenues this year, which grew from the previous year when the corporation had a $1.49 billion profit on $27.9 billion in revenues.
