To optimize the omnichannel approach taken to its retail business, Macy’s plans to close 35 to 40 underperforming stores in early 2016. Those stores represent about 1% of total Macy’s sales, the company noted.
The annual sales volume Macy’s expects to lose due to the store closings, net of revenues retained in nearby stores and online, is $300 million. The company stated that it would identify at a later date the stores that will close after an analysis now underway and final determinations.
“Physical stores remain absolutely vital to our omnichannel strategy, which provides local touchpoints and tailored merchandise assortments for shoppers in nearly every major market,” said Terry Lundgren, Macy’s chairman and CEO. “As new shopping centers are opened, however, many customers change their shopping habits and often the sales volume of a store gets divided among the new and nearby, existing centers. Each year, we prune some stores that are our weakest performers so that we can concentrate our resources on the best locations and maintain a strong physical presence. At the same time, we open a small number of new stores to fill gaps in our market coverage or where we have outstanding real estate opportunities.”
Lundgren characterized Macy’s web operation as “one of the largest and fastest-growing digital platforms in the country. Our fast-growing digital offering, including robust apps and mobile-enhanced websites, integrate with our stores to provide an unparalleled omnichannel shopping experience for customers wherever, whenever and however they prefer to shop. As a result, we are able to attract new customers and grow sales profitably.”
Macy’s operates 770 namesake department stores. It has closed 52 Macy’s stores over the past five years and opened 12 new Macy’s stores. The company will open a total of six new Macy’s Backstage offprice locations in the current fiscal year.