Macy’s is planning a major overhaul. Over the next three years, Macy’s will be closing approximately 150 stores. At the same time, it plans on opening new Bloomingdale’s and Bluemercury locations to further lean into those brands.
These closures are targeting stores Macy’s deemed as underperforming and make up for 25% of Macy’s footprint but only 10% of sales, according to the New York Times. Last month, Macy’s already announced several closures that removed 2,350 positions, which make up 3.5% of the company’s total workforce.
Macy’s announces that 150 stores will close over the next three years
50 stores are expected to close by the end of 2024 and the remaining over 100 will shut their doors by the next few years. According to a company statement, by the end of this closure, there will be just 350 Macy’s stores left.
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This is in response to a major overall shift in shopping practices and economic demographics in the U.S. CNN Business attributes it to a shrinking middle class, which led to a split in the most common types of stores. There are low-priced retailers of convenience like Walmart that maintained a wide audience, but Macy’s, which straddled the line with more expensive merchandise, found a much-depleted audience.
This, in turn, has informed not only Macy’s plan to close some 150 stores but also to open different stores and focus on different brands.
Macy’s will be focusing on luxury goods through Bloomingdale’s and Bluemercury
In the past, both Bloomingdale’s and Bluemercury have outperformed Macy’s proper, and it is these brands that will become the new focus amidst these 150 stores closing shop. The final product will be a Macy’s that is smaller and more focused on luxury shopping.
This also means less focus on the full-scale department stores that attract consumers of all backgrounds and shopping habits.
However, the big red star in the sky isn’t totally going out just yet. Although Macy’s is closing 150 of its bigger underperforming stores, it is also planning on building 30 Macy’s stores outside of shopping malls. These have traditionally been more profitable for Macy’s due to its smaller staff size and lesser inventory. This too represents a change in shopping practices, as consumers have been drifting away from malls for some time now.
