
Macy’s announces the closure of 66 stores as part of a broader strategy to revitalize its retail presence and boost profitability.
At a Glance
- Macy’s to close 66 stores as part of a plan to shutter 150 underperforming locations over three years
- Company will invest heavily in 350 high-potential stores through fiscal 2026
- Strategy aims to optimize customer engagement and operational efficiency
- Closures target underperforming locations to improve operating margins and return on invested capital
- Macy’s stock has decreased by more than 15% over the past 12 months
Macy’s Bold New Chapter: Streamlining Operations
Macy’s, the iconic American department store chain, is taking decisive action to address its recent lackluster performance and adapt to the evolving retail landscape. The company has confirmed plans to close 66 store locations as part of its “Bold New Chapter” strategy, which aims to achieve sustainable and profitable growth. This move represents a significant step in Macy’s broader plan to shutter approximately 150 underproductive stores over a three-year period.
The closure of these 66 stores marks the first phase of Macy’s strategic downsizing, accounting for 44% of the planned closures. This decision comes in the wake of a challenging period for the retailer, with its stock value declining by more than 15% over the past 12 months. In December, Macy’s was forced to reduce its annual profit forecast due to weak demand for apparel and shoes, further highlighting the need for a comprehensive restructuring plan.
Investing in High-Potential Locations
While Macy’s is closing underperforming stores, the company is simultaneously planning substantial investments in its most promising locations. The retailer has announced its intention to invest heavily in 350 go-forward stores through fiscal 2026. This strategic realignment demonstrates Macy’s commitment to quality over quantity, as it seeks to enhance its presence in key metropolitan areas and improve its overall operational efficiency.
“Closing any store is never easy, but as part of our Bold New Chapter strategy, we are closing underproductive Macy’s stores to allow us to focus our resources and prioritize investments in our go–forward stores, where customers are already responding positively to better product offerings and elevated service,” Tony Spring, Chairman and Chief Executive Officer of Macy’s, Inc. said.
The company’s First 50 pilot program has already shown promising results, with increased sales for three consecutive quarters and record customer satisfaction scores. By concentrating resources on better-performing stores, Macy’s aims to offer improved product selections and elevated customer service, ultimately enhancing the shopping experience for its patrons.
Adapting to Modern Retail Dynamics
Macy’s restructuring strategy is not merely about closing stores; it’s a comprehensive approach to aligning with modern retail dynamics and enhancing omnichannel capabilities. The company expects to generate significant cost savings and improve inventory management through this initiative. Historical data suggests that following store closures, Macy’s typically experiences a 15-20% sales transfer to nearby locations and online channels, indicating that the impact of these closures may be partially mitigated by increased efficiency in remaining stores and digital platforms.
By streamlining its physical presence, Macy’s aims to unlock significant real estate value, which can be reinvested in high-potential locations and digital capabilities. This approach positions the company to capitalize on operational efficiencies while maintaining a strong market presence in key areas. The focus on enhancing customer experience and digital integration reflects Macy’s commitment to shifting towards a more sustainable and competitive business model in the face of changing consumer preferences and shopping habits.