Macy's Is Starting 2023 With Even More Closures
The latest shutterings are part of a three-year plan to cut back locations.
The last decade has not been an easy one for legacy retailers. Iconic shops that once dominated the mall landscape have begun to whittle down their location numbers as customers increasingly make their purchases online, swapping their shopping bags for shipping boxes. As a result, some stores have been forced to close down entirely, while others are using downsizing as part of their strategy for the future. One such retailer is Macy's, which will be starting 2023 with even more closures in the coming weeks. Read on to see which locations of the beloved department store will soon be gone.
Macy's is closing more locations in the first quarter of this year.
Devoted Macy's shoppers may have noticed that the store has decreased its retail footprint in recent years. Now, the iconic department store will kick off the new year with more closures as it plans to shutter four locations in the coming weeks, Axios reported.
In California, customers in Los Angeles will soon lose the Baldwin Hills Crenshaw Plaza store at 4005 Crenshaw Blvd. Meanwhile, a nearly 50-year-old location in the Foothills shopping mall in Fort Collins, Colorado, will also close its doors for good by March.
Hawaii will also lose a Macy's store when the Windward Center location in Kaneohe on Oahu closes. And shoppers in Gaithersburg, Maryland, will lose their local outpost of the department store when the Lakeforest Mall location shutters in the coming weeks.
While no exact final shopping dates were given for the locations, they're expected to close during the company's first quarter of the year, which ends in late April or early May, Axios reported. Clearance sales are slated to begin at each location this month and run for eight to 12 weeks.
A spokesperson for Macy's confirmed the four closures in an email to Best Life.
The latest store closings are part of a strategy announced by the company two years ago.
While the move to reduce retail space has become all too common in recent years, the latest Macy's closures are actually part of a long-term strategy for the company. In 2020, the company announced that it would be shuttering 125 of its stores—or one-fifth of all its locations—over the following three years.
"As part of our Polaris transformation strategy, we continue to optimize and reposition our store fleet to ensure we have the right mix of on-mall and off-mall stores to better serve our customers and effectively support omnichannel market sales growth," a Macy's spokesperson told Best Life in a statement. "As a company, we are committed to offering impacted colleagues a role in nearby locations or severance packages."
The retailer is also focusing on new brick-and-mortar strategies.
Despite losing some of its traditional format locations in recent years, Macy's is still pushing forward with the expansion of some of its newer concepts. In 2022, the company opened four new locations of its new off-mall, smaller-format Market by Macy's stores, bringing it to a total of eight locations. And the company also opened 42 more of its off-price Macy's Backstage locations, bringing the total to more than 300 nationwide.
Executives say these moves align with the company's financial earnings and intended strategy. "We continue to see the importance of main locations within the best malls particularly as we build out our omnichannel ecosystem," Macy's chief financial officer Adrian Mitchell said in a statement emailed to Best Life. "We expect to announce less than 10 store closures in January, consistent with our decision to delay the closure of our full-line store base that we communicated last year."
Experts say there could be more challenges ahead for retailers like Macy's.
So far, Macy's has been able to coordinate a relatively soft restructuring by reducing its footprint. "The heavy lifting in closures has been completed over the past couple of years, and much of the dead wood has been cut out," Neil Saunders, managing director of data analytics and consulting company GlobalData, told Axios.
But while he said the latest closures are "more an opportunistic and gentle pruning," there could be more trouble ahead. "I fully expect there to be more closures this year and in the years ahead as Macy's still has a lot of sub-optimal stores that will probably perform badly as the consumer economy tightens," he added.
Other experts agree there are some warning signs that things could soon turn grim for major retailers. In a research note posted by analysts with investment bank UBS last month, data found that customers have become willing to spend money on items like apparel and accessories as budgets grow tighter and prices increase, Retail Dive reported.
"We believe Department Stores face many challenges ahead," wrote Jay Sole, an analyst with UBS said. "We model very weak earnings outlooks for Nordstrom, Kohl's, and Macy's, and believe these challenges are not fully appreciated by the market," specifying that increasing inflation and a potential recession should make conditions worse for the traditional retailers.