Macy’s Announces Plans for Revamp as Company Shifts Focus to Luxury Brands
In a bid to turn around its struggling business, Macy’s has announced plans for a major overhaul that includes closing 150 underperforming stores and focusing on its successful luxury brands, Bloomingdale’s and Bluemercury.
The iconic retailer will be closing 50 stores by the end of 2024 and another 100 in the coming years, with only 350 Macy’s stores remaining by 2026. This move comes as Macy’s looks to cater to wealthier shoppers who have been driving the success of luxury brands in recent years.
“We believe that reducing Macy’s store base to a more manageable (and profitable) size is prudent given the overall structural shift toward online spending and away from department stores,” said retail analyst Dana Telsey.
The company plans to open more stores of its successful luxury brands in smaller, outside-of-malls locations, reflecting a trend of consumers preferring smaller stores over traditional department stores. Macy’s also aims to improve its digital store and focus on offering customers the brands and items they desire.
New CEO Tony Spring described the strategy as a “bold new chapter” for Macy’s, with the full support of the company’s board of directors. The focus on enhancing customer relationships, relevant assortments, and compelling value is expected to lead to sustained earnings growth over time.
Macy’s also announced plans to open 15 new Bloomingdale’s stores and 30 new Bluemercury stores over the next three years, along with remodeling 30 existing Bluemercury stores. Analysts believe this expansion could be beneficial, especially in markets where these luxury brands are not currently represented.
The company’s new strategy comes amidst a challenging retail landscape that has hit department stores hard. Macy’s stock price has fallen significantly in recent years, and the company has faced pressure from online retailers like Amazon and discount chains such as TJ Maxx.
Macy’s hopes that by focusing on luxury brands and smaller, more profitable stores, it can fend off activist investors and improve its stock price and sales performance. Shares of Macy’s were down slightly in pre-market trading following the announcement, but the company is optimistic about its future prospects.