Macy’s to Close 65-150 Stores 45 Bloomingdale’s, issues Layoffs!

The major retailer is restructuring. Macy’s Inc., once a leading name in American retail, has announced an accelerated plan to close 65 stores by the end of the year, as part of a broader effort to shutter 150 underperforming locations over three years. This decision, revealed during the company’s latest earnings call, aims to streamline operations and adapt to a challenging retail environment dominated by e-commerce and declining mall traffic.

Macy’s, Manhattan.Unsplash, 2024
https://unsplash.com/photos/a-busy-city-street-g84Oq8VqKlU

CEO Tony Spring emphasized that these closures will occur after the holiday season, allowing affected locations to remain open for the critical shopping period. After these closures, Macy’s will operate just 350 stores, down significantly from its peak of over 1,100 in 2008.

Macy’s reported a 2.4% decline in sales for the quarter ending November, prompting a downward revision of its 2024 earnings forecast. Following the announcement, shares fell over 12% but later showed some recovery. Spring outlined a strategy for “sustainable, profitable growth” through the “Bold New Chapter” initiative. This includes investment in high-performing stores, dubbed the “First 50,” which have shown a 1.9% increase in third-quarter sales.

CFO Adrian Mitchell noted that the closures target stores with poor economic performance, particularly in areas where customers have shifted their shopping habits. Most closures will avoid single-store markets. Macy’s also plans to expand its Bloomingdale’s and Bluemercury chains, adding about 45 locations, while introducing nine new Macy’s stores and remodeling two others.

The retailer faces additional challenges, including an accounting scandal involving $150 million in concealed delivery expenses, which has impacted its financial outlook. Despite these obstacles, analysts like Neil Saunders of GlobalData highlight Macy’s continued profitability and resilience, even as the company navigates what many term a “retail apocalypse.”

Macy’s is currently NEAR all all time Year To Date Low.
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Author: Ryan Bridglal, 12/13/2024