Macy’s Plans to Close 150 Stores by 2026
Macy’s is betting that its future lies in luxury.
The retailer is planning to close about 150 stores over the next three years, while expanding the footprint of Bloomingdale’s and Bluemercury, The New York Times reported on Tuesday. The latter are considered to be more upscale shops, with Bloomingdale’s offering a number of luxury goods and Bluemercury focused on beauty and skin-care products.
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“We have to focus on having the best stores, not the largest number of stores,” Tony Spring, the new Macy’s CEO, said on a call with analysts.
The soon-to-be shuttered locations make up 25 percent of the company’s overall square footage but only 10 percent of sales, the Times noted. Some 50 will be phased out this year, while the rest will close by 2026, leaving about 350 Macy’s locations total. Meanwhile, the company will open 15 new Bloomingdale’s locations and 30 Bluemercury outposts.
Spring’s decision is part of a larger overall shift to position Macy’s as a higher-end brand across the board. Along with opening more luxury-focused stores, the company will work to make the shopping experience at Macy’s even better, something that came up in customer research. That potentially means updated merchandise assortments and more workers who have been trained to recommend products to shoppers and help them in the fitting rooms.
“I don’t believe that taste and style need to cost more; I don’t think it should be reserved for the affluent,” Spring said. “I think that we need to do a better job in our content and in our presentation and in our marketing, so that the customer sees and is inspired by what we’re selling.”
Still, it’s unclear whether the company’s pivot will pay off. More and more, people are doing their shopping online, and both Macy’s and Bloomingdale’s saw sales drop in 2023 compared with the year prior. (Sales at Bluemercury, however, rose 2.3 percent.) But Macy’s is hopeful that brick-and-mortar shops will lead to more online sales: About 80 percent of Bloomingdale’s digital sales are in markets where there are also physical stores, The New York Times said.
Even then, high-end consumers often turn toward individual retailers for their clothes, accessories, and more, opting to shop at an individual Chanel, Louis Vuitton, or Hermès store rather than a department store.
“There’s less competition there, but the problem is that it’s not clear that the luxury department store really has a great future,” David Swartz, a retail analyst, told the Times. “A lot of luxury labels are doing their own direct selling.”
Malls have been on their way out for a while now, and department stores may be the next to fall.
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