Macy's plans to close roughly 150 of its locations over the next three years in a strategy shift that leans more heavily on its luxury Bloomingdale's and Bluemercury chains.
The company announced the shift publicly Tuesday morning, saying it was entering a "bold new chapter" with a new CEO, Tony Spring. Macy's will be down to 350 stores once all of the planned closures occur. In turn, the company will add roughly 45 Bloomingdale's and Bluemercury locations.
"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," Spring said in a statement. "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 said it was targeting under-performing locations for closure. Such locations account for 25% of the company's square footage but just 10% of its sales, according to The New York Times.
MACY'S WILL CLOSE THESE FIVE STORES FOLLOWING LAYOFFS OF MORE THAN 2,300 EMPLOYEES
At least 50 Macy's locations will shutter this fiscal year, with the remainder closing by the end of 2026, the company said.
MACY'S OPENING UP TO 30 SMALL-FORMAT STORES
The announcement comes barely a month after the company announced another series of closures in mid-January. That plan called for closing five locations and removing roughly 2,350 positions, or 3.5% of the company's overall workforce.
The company said that the layoffs come as management plans to streamline its supply chain by implementing more automation.
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In October, the retailer announced that it is accelerating its small-format store expansion by opening up 30 smaller stores across the U.S.
The news built 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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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.
