The retail department store Macys will close 125 stores over the next three years. The closures represent roughly 1/5 of its total retail stores around the world in an effort to stay afloat long-term. As part of the closures, the company plans to eliminate roughly 2,000 positions from both its retail and corporate offices, a number that represents around 9% of its total workforce.
Macy’s is not the first luxury department store to scale back on its brick and mortar presence in the wake of the apparent retail apocalypse. Companies like Nordstrom and Bloomingdales have scaled back or changed their business plans in recent years. Meanwhile, stores like Barney’s have closed their doors altogether as declining retail sales have stifled business enough to see the company’s demise once and for all.
Macy’s is just one luxury department store to make major changes in the wake of online shopping.
Luxury retail stores like Macy’s have suffered in the online age, where consumers are shopping online at retailers like Amazon more often and heading into physical stores less. Nordstrom, one company that has managed to maintain its business in recent years, made significant investments to its online business to accommodate new shopping habits.
Macy’s plans to close its stores in low-tier malls around the country in order to prioritize its more successful locations. As a luxury retailer, the company will focus its retail efforts on locations that garner more foot traffic, such as high-end malls and shopping centers in areas that attract a lot of shoppers on a regular basis.
The announcement that it will close its stores was made earlier this month in an investors meeting on February 4th. “We will focus our resources on the healthy parts of our business, directly address the unhealthy parts of the business and explore new revenue streams,” said the company’s CEO, Jeff Gennette, in a statement. “Over the past three years, we have shown we can grow the top-line; however, we have significant work to do to improve the bottom-line. We are confident the strategy we are announcing today will allow us to stabilize margin in 2020 and set the foundation for sustainable, profitable growth,” he continued.
Macy’s will close 125 stores throughout America.
Dozens of stores saw their demise in the 2010’s with the arrival of easy online shopping experiences at retailers like Amazon. Companies like Brookstone and the young women’s clothing store Charlotte Russe saw closures in malls around the country before ultimately shutting their operations down for good.
Other retailers, like Forever 21, have cut back on their brick and mortar presence significantly in recent years. Forever 21 even filed for bankruptcy, showing that shoppers are increasingly turning toward smaller, direct to consumer brands and easy shopping experiences like Amazon Prime.
Macy’s plans to close a handful of its stores in the next year all over the country, with more closures planned over the next couple of years. The company, which will focus its efforts more into online shopping, is likely following in the footsteps of other luxury retail department stores like Nordstrom.