Macy’s has announced it will close 150 stores, or about 30% of its American chain, as the department store giant increases its focus on luxury goods under a new chief executive.
The company said in a Tuesday filing that the planned closures over the next three years will free up up to $750 million worth of real estate assets, as the department store chain focuses on growing its luxury brands.
Over the same three-year period, Macy’s plans to add 30 new locations for its luxury cosmetics brand Bluemercury, as well as 15 new locations for upscale Bloomingdale’s stores, according to Bloomberg.
This is the latest downsizing for Macy’s, a once vast chain that operated 870 stores, including 643 Macy’s stores, as of 2019.
The move also comes less than a month into the term of Macy’s new chief executive, Tony Spring, who spent 40 years in executive roles at Bloomingdale’s. He later took command.
“Inflation is still rising, although not as much as before. We need to fight for our fair share and fundamentally reposition our businesses for growth,” according to Bloomberg. ” Spring said.
It was not immediately clear how many employees would be affected by the impending closure, but Macy’s said in the filing that it would incur $50 million in costs related to termination costs.
Many of the stores scheduled to close are located near other Macy’s stores, so some employees may be transferred. According to Bloomberg.
“Shoppers remain under pressure,” Spring added.
Representatives for Macy’s, which has about 500 stores nationwide, did not immediately respond to The Post’s request for comment.
Macy’s is in a battle with two activist firms seeking to buy the company for $5.8 billion, a deal that Macy’s reportedly rejected last month over valuation concerns.
ArkHouse Management announced nine director nominees for Macy’s board last week, shortly after the retailer rejected a proposal to go private from ArkHouse and its partner Brigade Capital. .
ArkHouse announced last Tuesday that it had provided additional financing details for the 50% equity portion of the transaction, including the names of highly valued equity partners with more than $75 billion in assets under management.
Macy’s, which is celebrating its 166th year in business, has recently suffered from weak demand as persistently high inflation and rising borrowing costs have led customers to cut back on spending.
Macy’s fourth-quarter results released Tuesday showed sales during the all-important holiday season fell nearly 2%.
Revenue was $8.12 billion, slightly below Wall Street expectations of $8.15 billion.
Going forward, the company said 2024 will be a year of “transition and investment,” and expects adjusted earnings of $2.45 to $2.85 per share, below analysts’ expectations of $3. Weaker than the outlook.
U.S. inflation rose a bigger-than-expected 3.1% in January, according to the latest Consumer Price Index, which tracks changes in the cost of everyday goods and services, and the first of three long-awaited interest rate cuts. Wall Street’s hopes that it would be implemented this year have waned. This year may come as early as March.
The U.S. Bureau of Labor Statistics is scheduled to release its February CPI report on March 12th.
