Macy's Is Closing Stores to Cut Costs—Here's Where
The closures are part of a larger plan to improve the shopping experience, the company said.
For those of us who still prefer to shop in person instead of online, the news of yet another round of closures is disappointing, to say the least. This is particularly true when it's a brand like Macy's, which has been a trusted name for generations. But just like many other department store giants, Macy's has been forced to change with the times—especially since shopping malls are now seen as relics of the past. The former mainstay has actively shuttered locations in recent years, including a handful at the beginning of 2023. And now, Macy's is closing additional stores to cut costs.
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Macy's informed employees of the closures and other impending changes in a memo sent out on Jan. 18, The Wall Street Journal reported. Per "people familiar with the situation" and the memo, which was reviewed by the outlet, Macy's decision was fueled by the need to save money and improve the shopping experience for customers.
"Despite our strong and tangible progress over the last few years, we remain under pressure," Jeff Gennette, Macy's CEO, and Tony Spring, Macy's president and CEO-elect, wrote in the memo, per the WSJ. The executives added that these decisions were made after a year of consumer research. Exact changes include adding automation to the supply chain, outsourcing certain roles, and reducing management layers to make quicker decisions, the outlet reported.
As another part of the plan, the company is closing five stores in the U.S., as well as two furniture locations that will be sold and relocated.
The closures will affect four states: Virginia, California, Florida, and Hawaii, per the WSJ. Closing stores are the Macy's at Ballston Quarter in Arlington, Virginia; Macy's Bayfair Center in San Leandro, California; Macy's Simi Valley Town Center in Simi Valley, California; Macy's Governor's Square in Tallahassee, Florida; and Macy's Kukui Grove Center in Lihue, Hawaii.
In a statement to Best Life, a Macy's, Inc. spokesperson confirmed that the Macy's South Hills Furniture and Mattress Gallery will be integrated into the full-line Macy's South Hills location. The Boca Raton Furniture and Mattress Gallery location will also be sold "with a lease back option through mid 2024."
"It is our intent to relocate our furniture and mattress gallery to a nearby location once the lease expires, and our Macy's colleagues will be eligible for transfer," the spokesperson added, noting that employees at the South Hills furniture location will also be eligible to transfer. "We will share updates as we finalize our plans. In the meantime, we look forward to continuing to serve our customers and the Boca Raton community."
The spokesperson did not provide additional details on when stores will be closing.
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In addition to store closures, the company announced plans to lay off 13 percent of corporate staff, or 2,350 positions, the WSJ reported. The memo noted that layoffs will take place on Jan. 26.
"As we prepare to deploy a new strategy to meet the needs of an everchanging consumer and marketplace, we made the difficult decision to reduce our workforce by 3.5% to become a more streamlined company, the spokesperson told Best Life about the layoffs.
Back in Nov. 2023, there were some signs of trouble for Macy's, as the company reported a 7 percent drop in year-over-year sales during the third quarter. Both brick-and-mortar and online sales declined by 7 percent as well, and net income and revenue slumped, too, according to a press release outlining earnings.
The performance, however, did beat Wall Street's expectations, generating more revenue than analysts expected and besting predictions for same-store sales decline. Going into the holidays, the company also had a positive outlook.
"We delivered better-than-expected top and bottom line third quarter results and are entering the holiday period in a healthy inventory position," Gennette said in the Novemeber press release. "Our portfolio of nameplates are leading gift-giving destinations across the value spectrum offering exclusive products. We have refined our gift assortment, simplified our promotions and improved our shopping experience."
Macy's hasn't yet put out numbers from the holiday season. According to the WSJ, the next earnings report is expected to be released in February.
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