Just when we discovered that Lord & Taylor is making a comeback, news broke that another iconic department store is drastically decreasing its retail footprint. In a third-quarter earnings call on Wednesday, Macy’s chairman and CEO Tony Spring said the company will close 65 more underperforming stores by the end of January 2025, up from the 55 closures it previously planned by the end of its fiscal year.
The news comes as the company shares that total net sales were $4.7 billion in the third quarter, down 2.4 percent from the same time last year. It also follows Macy’s discovery last week that an employee had made and subsequently covered up a $151 million accounting error that caused their stocks to fall, according to the The Wall Street Journal.
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The closures are part of Macy’s “Bold New Chapter” initiative.
At the beginning of this year, Macy’s announced its “Bold New Chapter” initiative to “fundamentally reposition the company, enhance the customer experience, deliver growth and unlock shareholder value.”
Part of this plan was to close 150 “underproductive” Macy’s stores through 2026, including 50 by the end of the fiscal year (January 2025).
As to why this number has now jumped to 65, Spring explained in this week’s earnings call: “At the start of the closure strategy said we had locations that were less profitable and less productive, and we wanted to monetize them as soon as possible. So, the fact that we are closing more stores this year is a reflection of the fact that our assets have value and that even in this less stable market, we are transacting.”
As yet, Macy’s has not shared which 65 stores will soon be shuttering.
Macy’s is also opening new stores.
Macy’s is sharing a good deal of positive news, too. The company also owns Bloomingdale’s and Bluemercury, and as part of a Bold New Chapter, they announced that they’d be opening 15 Bloomingdale’s stores and 30 new Bluemercury stores (along with 30 Bluemercury remodels) through 2026.
Adrian Mitchell, Macy’s chief financial officer and chief operating officer, provided an update on these stores in the earnings call: “Both Bloomingdale’s and Bluemercury had a strong third quarter. Bloomingdale’s net sales were up 1.4% and comps rose 3.2%, while Bluemercury net sales were up 3.2% and comps rose 3.3%.”
And seeing some growth.
There are currently 475 traditional Macy’s stores in the U.S., 50 of which were identified as “First 50,” high-performing stores where the company has made extra investments and where comparable-store sales grew 1.9 percent during the third quarter.
As The Wall Street Journal notes, these stores saw particular growth in the handbag and shoe departments, so Macy’s will now provide additional staffing to these departments in 100 more stores.
“We look forward to expanding our First 50 program in 2025, and we will talk about that more on the fourth quarter earnings call,” Spring said.
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But Macy’s future remains uncertain.
Despite the positive news, some experts remain uncertain about Macy’s future.
In speaking with The New York Times this week, Morningstar analyst David Swartz said he believes “the state of the company is generally unhealthy.”
“Macy’s is constantly downsizing and hoping that the turnaround plans will improve the performance of the remaining stores,” Swartz added. “But in the past, we have not seen that, and so people are not confident today either.”
It’s also yet to be seen how Macy’s will finish out its fourth quarter, which includes the holiday shopping season and, last year, accounted for 35 percent of the company’s annual sales.
Best Life has reached out to Macy’s about the impending store closures and 2025 plans and will update this story with their response.