- Macy’s will close around 100 stores next year
- The closures mean it will shed around 14% of shops operating under the Macy’s fascia
- Comes after the department store chain suffered a drop in second-quarter profits
Macy’s has unveiled plans to shutter around 100 stores and drive investment in its online business following a drop in second-quarter profits.
The closures by the US department store giant, which also owns Bloomingdale’s, represent around 14% of its shops operating under the Macy’s fascia.
The business said it would refocus investment on increasing the proportion of exclusive products and the stores that offer the highest growth potential, as well as its ecommerce operations.
Macy’s revealed the changes as it posted a steep drop in second-quarter performance.
Profits slumped to $11m compared with $217m during the same period last year, as sales dropped 3.9% to $5.87bn.
However, the company’s results beat Wall Street forecasts, prompting a 14% spike in its share price to $38.95 during early trading yesterday.
Macy’s president Jeff Gennette, who will succeed Terry Lundgren as boss in 2017, said: “The announcements we are making today represent an advancement in our thinking on the role of the stores, the quality of the shopping experience we will deliver, and how and where we reinvest in our business for growth.”
Macy’s has suffered from slowing sales during the past 18 months as it grapples with changing shopping habits.
Consumers in the US are spending more cash on home improvements and leisure activities including holidays and dining out, while the performance of fashion rivals including H&M and TJ Maxx has also dented Macy’s sales.
The growth of Amazon’s private-label fashion offer will heap further pressure on the business. The etailer is expected to surpass Macy’s as the largest online seller of clothing in the US next year, according to some analysts.
Following the store closure programme, Macy’s will have 666 shops including 38 Bloomingdale’s sites.
That represents a fall of almost a quarter from its peak in January 2007, when it had 868 stores.
Macy’s said many of the store closures will take place in early 2017 as leases expire.
The retailer expects full-year revenue from stores that have been open at least 12 months to fall between 35 and 4%.