Macy’s has announced plans to expand its list of store closures to 65 locations by January 2025 as part of its ongoing efforts to streamline operations amid declining sales. The retail giant’s net sales for Q3 dropped 2.4% year over year, leading to the addition of 15 more underperforming stores to its closure list, previously set at 50 locations.
“Bold New Chapter” Plan
The closures are part of Macy’s broader “Bold New Chapter” strategy, which aims to shutter 150 stores by 2026 in a bid to improve profitability.
- CEO Statement: Macy’s CEO Tony Spring said the initiative moves the company closer to “becoming a more profitable Macy’s, Inc.”
- Sales Trends: While net sales were flat at $4.7 billion compared to November’s report, comp sales rose 3.2%, driven by categories such as women’s contemporary apparel, beauty, and digital sales.
Focus on Growth Areas
Despite challenges, Macy’s highlighted growth in specific sectors:
- Brands: Successful partnerships with names like Jenni Kayne and Kim Kardashian’s Skims boosted interest.
- Luxury Lines: Bloomingdale’s and Bluemercury saw positive comps in Q3, with customers responding to diverse price points and exclusive products.
Fraudulent Accounting Incident
Macy’s had delayed its full Q3 earnings report due to an internal investigation into an employee accused of concealing $150 million in expenses over several years.
- Details: The discrepancies, occurring between Q4 2021 and November 2023, were related to small-package delivery expenses.
- Impact: CFO Adrian Mitchell assured investors that the entries had an “immaterial impact” on financial results, with no effect on revenues, cash flow, or inventory payments.
Retail Challenges
Macy’s joins other traditional retailers struggling to adapt to shifting consumer behaviors, as online shopping dominates and economic concerns drive decreased spending. Macy’s stock reflected these challenges, dropping 0.3% midday after an earlier 1.3% decline.
The retailer remains focused on improving profitability and expanding growth in key categories as it navigates a difficult retail landscape.
