Macy’s, Inc. announced yesterday that it plans to close 100 of its 728 department stores. The company has positioned the move as a necessary step to drive profitable growth and provide the types of returns its investors expect.
The store closings are part of the company’s plan to shutter under-performing locations with the goal of driving more business to those that remain. Macy’s, which operates in 49 of the top 50 markets in the U.S., has emphasized the value it places on its physical locations as part of the company’s evolving omnichannel strategy.
“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,” said Jeff Gennette, Macy’s, Inc. president and CEO designee for 2017.
While acknowledging the closings would hurt total sales, Mr. Genrette said the decision would ultimately boost same-store performance.
“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,” he added.
Macy’s and sister sites for Bloomingdale’s and Blue Mercury are making investments in their digital operations, including their websites and mobile apps. The company listed faster page loading, improvements in natural language search, and a simpler process for ordering and fulfilling orders as among the areas where it has directed resources. Macy’s and Bloomingdale’s Buy Online Pickup in Store program is also being tweaked for faster and more convenient customer experiences.
Macy’s is also exploring ways to monetize its real estate holdings. Macy’s listed its Men’s Store on Union Square in San Francisco as a property it is looking to sell.
Investors reacted positively to Macy’s announcement, sending the company’s share price 17 percent higher at one point, the biggest single day gain for the company since 2008, according to a Wall Street Journal report.