Macy's To Shutter 100 Stores By Early 2017
By Christine Kern, contributing writer
Closings will be part of an effort to heighten the brand’s shopping experience.
Macy’s has announced that it plans to close 100 full-line stores by early 2017, targeting locations where the value of the real estate exceeds their value as retail stores. The chain has not released a list of affected stores to date, but Macy's representatives asserted that associates displaced by the closings may be offered positions in nearby locations, and eligible full-time and part-time associates laid off due to store closings will be offered severance benefits.
The planned closures will reduce the number of Macy's full-line stores to 575, and accompanies an initiative to "heighten" its brand with exclusive products and an upgraded shopping experience. The chain also plans to reallocate investments to its highest-growth-potential store and digital businesses.
“The announcements we are making today represent an advancement in our thinking on the role of stores, the quality of the shopping experience we will deliver, and how and where we reinvest in our business for growth. In the short term, our company’s topline sales will be somewhat smaller, but the changes being made will position us to grow comparable sales more quickly and generate a level of profitability that stands out among retailers,” said Jeff Gennette, Macy’s, Inc. president, who is designated to succeed Lundgren as chief executive officer in the first quarter of 2017.
“We will continue to carefully analyze consumer shopping patterns and trends, and use data and customer insights as the basis for innovations to drive the business. You can look forward to a company that expedites decision-making, moves faster, and is bolder in its approach to the customer.”
According to CNBC, Macy's will invest in capacity-building across its sites and apps, targeting improvements in natural language search, faster page loading and more efficient procedures for placing and fulfilling orders. The company also will overhaul its Buy Online Pickup in Store offering, introduced in 2013, to boost speed and convenience. Macy's stock surged more than 12% higher in pre-market trading following the news.
Last year, Macy’s embarked on new initiatives designed to restructure and emphasize technology across the chain, marking an evolution in responding to the changing customer landscape and the pursuit of sales growth, as Innovative Retail Technologies reported. The chain has continued to struggle with low sales figures, as the new announcement reflects.
“We operate in a fast-changing world, and our company is moving forward decisively to build further on Macy’s heritage as a preferred shopping destination for fashion, quality, value and convenience. This involves doing things differently and making tough decisions as we position ourselves to serve customers who have high expectations of their favorite stores, online sites and apps,” said Terry J. Lundgren, Macy’s, Inc. chairman and chief executive officer.