Analysis: Is small the new big for department stores?

Nordstrom local

Alongside the news that Macy’s will be shutting 125 stores over the next three years as part of a cost-cutting initiative, the department store retailer also unveiled plans for a smaller-format store.

Alongside the closures, which will result in 2,000 job losses, was the news that the struggling US chain will be testing ‘Market by Macy’s’ – a new smaller store format selling a specially curated mix of merchandise and local products.

Smaller-format stores have been trialled by department store retailers throughout the years with mixed results. Debenhams trialled a mini-store format in 2004 that failed to take off, while Sears unveiled a smaller-format store, called Home & Life, in the US last year following its bankruptcy. While neither of these formats did much to revive the fortunes of either department store, others, such as Nordstrom’s Local format, have gained some traction.

As Macy’s prepares to trial its latest format, is small the new big for department stores? Or is this latest move little more than a last-ditch attempt to salvage the struggling business?

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