Macy's has officially announced plans to shut down 65 stores by the end of January 2025. This move is part of the brand's strategy to restructure its business. As per reports, the company is trying to adapt to changing consumer habits, and the rapidly expanding e-commerce sector.
Macy’s, which originally was R. H. Macy & Co., is America’s one of the oldest department store chains. The brand was founded in 1858 by Rowland Hussey Macy. Macy’s Thanksgiving Day Parade is one of the most anticipated events across the nation.
However, the retail chain has faced multiple challenges in recent years, such as the rise of online shopping, and shifts in consumer preferences. With all these, and the after-pandemic trends, Macy’s is reportedly finding it hard to sustain multiple of its physical stores.
Macy's decision to close 65 stores explored
Macy’s announced earlier this year that the brand is planning to close 150 unproductive stores by 2026, and it will reduce its total locations to nearly 350. The decision to fast-track the closure of 65 of these stores depicts the brand's urgency to cut costs and focus on profitable strategies.
According to Macy's CEO Tony Spring, the closures will take place after the holiday season. This is clearly to maximize the revenue during this peak shopping period. The move also allows the company to monetize real estate associated with these stores.
Chief Financial Officer Adrian Mitchell had to mention that the planned closures are related to underperforming locations where consumer habits have been believed to be shifted, making it difficult to sustain operations of those locations. As per Mitchell, these stores no longer align with the company’s long-term strategy.
The Bold New Chapter Initiative of Macy's
The retailer chain has taken a new business strategy: Bold New Chapter, part of which is the fast-forwarded closure of the 65 selected stores across the nation. This new initiative by the brand particularly focuses on a few points, among others.
Macy’s aims to develop and reshape its remaining 350 stores, which they have marked as high-performing stores. Investment in those locations will be increased significantly in order to improve the shopping experiences of the customers.
With online commerce becoming increasingly prevalent, the new initiative by Macy’s also prioritizes its digital platforms to remain competitive in a globally crowded e-commerce market.
Besides, plans reportedly include opening 45 new Macy's locations for its Bloomingdale’s and Bluemercury brands, and redesigning existing stores.
Macy’s decision to shrink its physical footprint is part of a modern trend in the lobal retail industry. As consumers are increasingly inclined towards online shopping, physical department stores are gradually becoming less relevant, and less necessary.
To adapt to this trend, retailers like Macy’s are trying to balance their offline and online growth to remain relevant in the industry.
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