After reporting a net loss of $71 million in the fourth quarter (compared to a $508 million profit the previous year), Macy’s has decided to shutter approximately 150 underproductive stores through 2026, the company’s new CEO Tony Spring announced on Tuesday. For the year, Macy’s Inc. generated $105 million in net income and just over $23 billion in sales compared to a net of $1.18 billion and just over $24.4 billion in sales in 2022.
In the plan called “A Bold New Chapter,” Macy’s will prioritize investment in about 350 “go-forward” locations and expand its small-format store chains including Bloomies, specialized and downsized Macy’s, Bloomingdale’s outlets and Backstage off-price units.
Macy’s, one of the major American department store chains, has been in existence since 1858, and was founded by Rowland H. Macy (1822-77), whose several previous attempts at retailing had all failed. Under the close supervision of Margaret Getchell, a Macy cousin and pioneer businesswoman, the store prospered after the American Civil War, relying on extensive advertising and its reputation for value. The company’s red star trademark was derived from a tattoo borne by its founder.
Its principal outlet, the 11-story department store that occupies a city block at New York City’s Herald Square (34th Street and Broadway), was for many years physically the largest single store in the country. Since 1924 Macy’s has held an annual Thanksgiving Day parade in New York City; first televised nationally in 1947, it remains of the country’s most popular parades.
But that was then, and this is now. In light of the new leadership and disappointing Q4 losses, perhaps the venerable retail chain has decided to hit “refresh.” Macy’s owners cite improving the brand’s “digital presence” as a key factor in the decision to close nearly a third of their stores. Yet it comes at a time when many bricks-and-mortar stores across the country are struggling to stave off competition from online retailers.
As for the new direction in retail outlets, Bloomies describes itself as a “highly curated, ever-evolving store concept that brings the best of Bloomingdale’s to your neighborhood. Think a place so fun and lively you could easily pop in to see us week after week.” On the other hand, Bloomingdale’s outlets and Backstage appeal to a consumer who is looking for a deal which is “off price, on trend, arriving daily.” This approach is more likely to compete with discount retailers like Ross and Marshall’s than Nordstrom’s.
Regardless, it is sad to see another seemingly indestructible retailer bite the dust. See if yours made the list here.
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