Macy's announced Tuesday that it will close 150 underproductive locations, including 50 by the end of the fiscal year. There was no information if the four stories in Southwest Florida — two in Sarasota and one each in Lee and Collier counties — would be among those closed.
Including the Southwest Florida stores there are 41 Macy's sites across the state.
The local Macy's are in Sarasota at University Town Center and Westfield Siesta Key, in Collier County at Coastland Center in Naples and in Lee County at Edison Mall in Fort Myers.
Macy's outlets in Port Charlotte and Daytona Beach were closed in 2021.
Macy’s did not provide a list of planned closures, but San Francisco’s Mayor, London Breed, confirmed that the retailer’s sprawling store in the city’s Union Square downtown shopping district would be shuttered. While not among the first 50 to be closed, Breed said she was told by Macy’s that it is seeking a buyer for the San Francisco property.
The news on shuttering the stores came as the department store operator said it posted a fourth-quarter loss and declining sales.
The Macy’s stores set to close account for less than 10% of its sales, the company said.
During the earnings call on Tuesday Macy's also revealed what it is calling “A Bold New Chapter.
“A Bold New Chapter serves as a strong call to action. It challenges the status quo to create a more modern Macy’s, Inc. We are making the necessary moves to reinvigorate relationships with our customers through improved shopping experiences, relevant assortments and compelling value,” said Tony Spring, chief executive officer, Macy’s, Inc. “Our teams are energized by the work ahead as we accelerate our path to market share gains, sustainable, profitable growth and value creation for our shareholders.”
Macy's officials said the changes were being made to strengthen the Macy’s Nameplate saying the company is prioritizing three key areas to return to top-line growth:
- Revitalizing the assortment to improve both relevance and value;
- Modernizing the shopping environment to facilitate a convenient, easy, and frictionless customer experience across channels with continued focus on digital excellence; and
- Focusing resources by closing approximately 150 underproductive locations, including approximately 50 by the end of the fiscal year, and prioritizing investment in approximately 350 go-forward locations and the continued expansion of small-format stores.
The company also said it has plans to take advantage of its leadership position in the luxury market, where Bloomingdale’s and Bluemercury have been outperformers within the Macy’s, Inc. portfolio and across the broader luxury landscape, by further growing its store fleet and digital presence.
As part of the strategy, Macy’s aims to upgrade its remaining 350 stores, with plans to add more salespeople to fitting areas and shoe departments, while adding more visual displays like mannequins. At the same time, the company signaled a pivot to luxury, which has fared better overall. It said it would open 15 of its higher end Bloomingdale’s stores and 30 of its luxury Bluemercury cosmetics locations.
The Macy’s stores set to close account for 25% of overall square footage but less than 10% of its sales, the company said.
While adjusted net income and revenue topped Wall Street expectations, Macy’s offered a muted outlook for the year.
“We are making the necessary moves to reinvigorate relationships with our customers through improved shopping experiences, relevant assortments and compelling value,” said Macy’s CEO Tony Spring, former CEO of Bloomingdale’s who succeeded Jeff Gennette earlier this month.
Shares of Macy’s rallied more than 4% in afternoon trading.
The plans come as the department store chain faces a proxy fight from Arkhouse Management which nominated a slate of nine director for election to Macy’s board last week. Last month, Macy’s rejected a $5.8 billion takeover offer from the hedge fund and Brigade Capital Management, an investment manager.
Activist investors and pressure to increase sales are just two critical issues facing the new CEO.
Even before the pandemic, department stores were facing intense competition from online rivals. Neiman Marcus and JCPenney filed for bankruptcy protection, emerging as smaller entities.
Consumers have proven resilient and willing to shop even after a bout of inflation, though behaviors have shifted, with some Americans trading down to lower priced goods.
Spring told analysts that while inflation has slowed, so has labor and wage growth.
“As such, we expect our consumer to remain under pressure,” said Spring, noting the company has to fight for market share in a tough environment. Even “aspirational” luxury shoppers have pulled back, he said.
Macy’s is maneuvering to shore up sales by accelerating the expansion of small-format stores that can provide more convenience to its customers. It announced plans in October to add up to 30 small-format locations through the fall of 2025, bringing the total number to roughly 42. The next round of expansion starts in the fall.\
WGCU is your trusted source for news and information in Southwest Florida. We are a nonprofit public service, and your support is more critical than ever. Keep public media strong and donate now. Thank you. The Associated Press contributed to this report.