Macy's said Tuesday that it's accelerating its small-format store expansion, opening dozens more locations nationwide starting next year.
The retail giant plans to open up to 30 small-format stores under the Macy's nameplate through fall 2025.
The news builds on its August announcement when the company said it was opening four small-format locations, which range between 30,000 and 50,000 square feet, about one-fifth the size of its traditional stores, within the Northeast and Western regions.
The company has been repositioning its portfolio to better adapt to the changing retail environment and compete with the likes of Target, Nordstrom and Kohl’s, which have been adding small-format stores over the past few years.
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Its announcement on Tuesday will bring the total number of small format locations to just over 40.
Macy's Chief Financial Officer Adrian Mitchell said the smaller-format stores will be more efficient to operate and help the company ensure long-term viability.
"Our small-format stores are efficient to operate, provide the customer with a shopping alternative within our omnichannel ecosystem and present a unique opportunity to target high-traffic shopping centers," Mitchell said, adding that the company will be able to "deliver sustainable, profitable sales growth for Macy’s, Inc. beginning in 2024."
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The stores are placed at off-mall shopping strips and carry a more limited and curated selection of merchandise including a mix of Macy’s private brand labels.
The expansion plan comes in addition to the nearly 15 small-format Macy’s and Bloomie’s locations that the company already operates. Bloomie's is the smaller store concept by Bloomingdale's, which is owned by Macy's Inc.
By the end of 2023, there will be 12 Macy’s small-format stores and three Bloomie's locations.
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Massive department stores have lost their edge in recent years with the COVID-19 pandemic delivering a blow to iconic names like J.C. Penney and Neiman Marcus, both of which filed for bankruptcy protection in 2020.
Bed, Bath & Beyond, once seen as a retail powerhouse, filed for Chapter 11 bankruptcy protection last April after suffering from mounting losses and several failed attempts to turn around its business.
Brands are now focusing on their omnichannel strategy, including enhancing online marketplaces and delivery capabilities, and slimming down store size, to better cater to the changing habits of shoppers.
