Macy’s, a longstanding fixture of the shopping mall, is expanding a standalone store strategy in a way that could change how customers think of the retail chain.
In Q4 of 2021, Macy’s witnessed a surprising degree of success from its Market by Macy’s stores, its new smaller-format unit. The retailer piloted the concept in five suburban “power centers” in Texas and Atlanta over the past two years, according to The Wall Street Journal.
Now the retailer has announced plans to open 10 new off-mall locations in the coming year, including new Market by Macy’s stores, standalone off-price concept Macy’s Backstage locations, Bloomie’s and Bloomingdale’s outlet stores.
Macy’s discovered that the small-format concepts — which are around one-fifth the size of a traditional mall store — are easier to staff and stock. Meanwhile, the chain has closed about half of the 125 underperforming mall locations it announced were marked for closure in February, 2020. Some off-mall locations will be opening in areas where mall stores were closed.
Last summer, Macy’s was touting the success of its digitally-focused turnaround strategy after a successful second quarter earnings report, according to CNBC. The report came after vaccines against COVID-19 became widely available but before the Delta variant of the novel coronavirus led to the reinstatement of some social distancing requirements and slowed foot traffic. This led to speculation that Macy’s was in part riding a pandemic lull-driven tailwind from pent-up demand.
Last fall, however, Macy’s reported a successful third quarter, again beating analyst estimates, according to a separate CNBC article. The chain said that it added 4.4 million new shoppers that quarter.
Macy’s is not the only mall-based retailer that has recently gotten serious about its off-mall presence.
On a conference call in April, Foot Locker discussed plans to continue accelerating its shift to off-mall locations, Seeking Alpha reported. The chain plans to expand its off-mall Power Store and community store footprint to 300 stores in the next three years.
Despite retailers bailing on malls, one expert, Natalie Kotlyar, managing partner at BDO USA, recently told Yahoo! Finance that malls are not dying, pointing to increased foot traffic as the pandemic appears to wane.
- Macy’s is Betting Even Bigger on Smaller Stores – The Wall Street Journal
- Macy’s shares soar as earnings trounce estimates, retailer says it’s gaining new customers online – CNBC
- Macy’s shares surge on upbeat earnings, decision to hire AlixPartners to review business – CNBC
- New Foot Locker Concept is powered by local culture – RetailWire
- Foot Locker: Bag A 5.3% Yield – Seeking Alpha
- ‘The mall is not dead’ amid rise in online shopping, retail expert says – Yahoo! Finance