The American department store group Macy's, which has been in trouble for years and is under pressure from a group of investors, will close 150 stores by 2026 to favor the upscale segment.
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Macy's, owner of the famous stores of the same name, believes that this operation will allow it to focus its investments on the 350 Macy's outlets that remain in operation, particularly through the expansion of smaller stores and modernization efforts.
In total, 30% of the group's Macy's stores (around 500, according to the website) will disappear, including “50 underproductive locations that were closed by the end of the fiscal year.”
The group, which employed around 94,500 people at the end of 2022, had already announced in January that it would reduce its workforce by 3.5%.
“The plan to revitalize the Macy's brand is long overdue and the recognition that something needs to change should be welcomed,” commented Neil Saunders, analyst at GlobalData.
“The company will 'modernize' the shopping experience, which hopefully means stores will benefit from a complete renovation and an appropriate number of employees (…) is the critical area where Macy's has consistently failed,” continues Neil Saunders gone.
The announcement boosted the company's listing on the New York Stock Exchange. At 15:00 GMT, shares were up 5.5% at $20.38.
Macy's, which also owns 33 Bloomingdale's luxury department stores and 159 Bluemercury makeup stores, has indicated it wants to focus on this more promising segment of the market. The company wants to “exploit its leading position in the luxury market,” according to the press release.
To this end, the group announced the opening of around 15 Bloomingdale's stores and at least 30 new Bluemercury stores as part of its new strategy presented on Tuesday.
Department store chains that once lured consumers to “malls” have been suffering for years from poor results and have been forced to reduce their reach, a situation that has been made worse by the Covid-19 pandemic.
The group also published dismal results for 2023 on Tuesday. Last year it achieved sales of $23.1 billion, well below the previous year's figure (-5.5%). Net profit remains in the green at $105 million, but fell significantly (-91%) due to a special charge.
“It is concerning that the usual Macy's narrative of making profits despite sales weakness has now collapsed,” commented Neil Saunders.
Macy's, weakened by its economic difficulties, is whetting its appetite against its will. In January he rejected a takeover offer worth around 5.8 billion