Retail giant Macy's announces another round of 45 store closures as part of its ongoing downsizing plan.
Macy's Announces Closure of 45 More Stores
Macy's, one of the largest department store retailers in the US, has announced the closure of 45 more stores, most of which will be shuttered early this year. This latest round of closures comes as part of the company's ongoing efforts to streamline its operations and focus on profitable locations.
The closure of Macy's stores represents a further blow to lower-end malls that have steadily lost anchors over the years. These closures, according to research from Green Street, would typically have played out over five to 10 years. However, the pandemic has concentrated these effects into a couple of years, intensifying the struggle for many malls.
The strategy behind these closures may have a geographic component, with Macy's focusing on desirable and well-trafficked malls. The retail giant currently operates 544 Macy's stores, 54 Bloomingdale's stores, and 166 Bluemercury stores as of the third quarter of 2020.
Analyst Nick Egelanian believes Macy's could close hundreds more locations and should do so. He suggests that the company needs to figure out how to operate profitably on the coasts and reinvent itself. Egelanian also criticises Macy's foray into off-price and plans to shift to strip malls, stating that these have served as a "giant distraction" from focusing on aspects of the business like merchandising.
In a bid to turn around its fortunes, Macy's announced its "Polaris" strategy before the pandemic. This strategy includes the closure of stores as part of its turnaround plan. Macy's is also committed to rightsizing its store fleet and has been shifting towards smaller, more localized store formats in line with urban proximity trends.
However, exact closure plans by city or region have not been specified. Several Chicago news outlets reported that the Water Tower Place store on Michigan Avenue is among the stores to close. A list of the locations and banners to close will be released later on Wednesday.
Macy's has also made some positive moves recently, with the appointment of a new chief merchant on Monday. The company will undoubtedly hope that these changes will help it navigate the challenging retail landscape and secure a more sustainable future.
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