Macy’s has announced plans to close 125 stores in the next three years, representing nearly 20% of its U.S. locations.
The closures by Macy’s include six full-line department stores, a Bloomingdale’s outlet shop, and a previously unannounced closure of a Macy’s store that took place last year.
The store closures, which will affect 18 states across the country, include a whopping three locations in California and Washington.
Macy’s has already closed three stores by the end of the third quarter of 2022, bringing its total number of retail locations to 722.
In order to reach its target, the company will need to close around 70 more stores.
In mid-November, Macy’s announced that it would be closing approximately ten stores in January. The retailer had previously planned to close more locations, but it has now announced that it is reconsidering the closure of the approximately 60 remaining stores out of a total of 125 targeted closures by 2023.
Macy’s will offer impacted employees at these locations severance packages or the opportunity to take on roles at nearby stores. The company did not disclose how many employees work at these locations.
In the face of declining foot traffic and increased competition from online retailers, Macy’s has shifted its focus toward online sales and fulfillment.
The store closures are a part of Macy’s strategy to optimize and reposition its retail locations to better support its multichannel sales and expand market share. The company has seen a big shift in sales from physical stores to online platforms and recognizes that its digital performance is stronger in markets where it has a physical presence. As a result, Macy’s aims to reduce its store inventory from 777 to 650 by the end of 2023. This decision comes as part of the company’s efforts to adapt to changing consumer behaviors and remain competitive in the retail industry.
This move has had a significant impact on the company. Its stock price has dropped 6.73% since the beginning of the year, and year-over-year sales declined by 3.1% in the third quarter of 2020. Despite these challenges, Macy’s executives believe that the store closures and the new online strategy will ultimately put the company in a stronger financial position.