Macy’s Bold New Chapter Includes Closing 150 Stores

Macy’s released its full-year sales results which showed revenue down 5.5% in 2023 compared to 2022. More concerning for the department store is that comparable store sales were down 6.9%, which is a performance comparison to the same stores open last year (comparable stores would not include new stores opened or closed within the year). In a move to focus on sustainable growth, the company announced its new strategy, called A Bold New Chapter.

Tony Spring Has A Bold Vision

Tony Spring, CEO and chairman-elect of Macy’s, started in his new role in February and is making moves to make sure Macy’s long-term profitability is a focus for the company. The decision to close 150 Macy’s stores over the next three years helps to reduce square footage among its least productive locations. The company stated that the stores being closed represented only 10% of the total sales for the company on 25% of the total square footage.

Macy’s will expand the store footprint for the Bloomingdale’s division with a projected 15 new stores. Additionally, Bluemercury, the Macy’s-owned beauty specialty store, will open 30 new stores. Last October, Macy’s said that it would accelerate the expansion of its small store format, tripling the number of these stores through 2025. The smaller store formats are located off-mall in neighboring shopping centers and closer to where the customer lives.

A Bold New Chapter For Macy’s

A Bold New Chapter will also focus on enhancing customer experiences in an attempt to reinvigorate relationships with customers, revitalize its product assortment, and focus on digital growth, according to the company’s earnings call presentation. “A Bold New Chapter serves as a strong call to action. It challenges the status quo to create a more modern Macy’s,” stated Spring. “Our teams are energized by the work ahead as we accelerate our path to market share gains, sustainable, profitable growth, and value creation for our shareholders.”

Department Stores Struggle In 2023

Department stores showed a 5.1% drop in sales in January and ended the fiscal year down 3.3%. Department store sales in 2023 underperformed pre-pandemic sales numbers. Large, oversized stores with layouts similar to that of department stores have been waning in terms of consumer shopping preference, especially with the younger generations. Many large format stores like Nordstrom
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, Bloomingdale’s, Macy’s, Walmart
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and Target
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have all been testing smaller format stores located in neighborhoods where the consumers live. Both Kohl’s and Ulta Beauty have been successful with this type of location strategy.

Digital Foot Forward

Retailers, including Macy’s Incorporated (including all of its nameplates), will continue to focus on the digital experience. For Macy’s, it will work to enhance its omnichannel experience with customers making sure there is a seamless experience across each of the channels it does business with consumers. The advancements in artificial intelligence will help all retailers build out stronger technological capabilities that impact the shopper journey including customer services, product recommendations, and enhanced product information availability. A Bold New Chapter includes many of these initiatives and will help Macy’s secure its future as part of the renewed retail landscape.