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August 12, 2016

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Macy’s to close stores, eyes online boost

Source: Agencies | August 12, 2016, Friday | Print Edition

MACY’S said yesterday it plans to close about 100 stores next year and boost its online investments as the largest department store chain in the US tries to become more nimble in an increasingly fierce market. The closures represent close to 14 percent of its stores under the Macy’s brand.

The company, which operates the upscale Bloomingdale’s stores as well, said it would increase its exclusive products and would prioritize its investments in the stores that offer the highest growth potential.

Macy’s also reported yesterday that second-quarter profits and sales fell. The results, however, beat Wall Street estimates.

“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,” said Macy’s President Jeff Gennette, who will succeed Terry J. Lundgren as CEO in the first quarter of 2017.

Macy’s had been a stellar performer since the Great Recession, but in the past year and a half, the company has seen slowing sales as it battles competition on all fronts and changing shopping patterns. People are spending more of their money on home improvement as well as experiences like travel or spas. And when they do buy clothing, they’re going to T.J. Maxx or fast-fashion chains like H&M. They’re also increasingly researching and buying online, and gravitating toward Amazon.com, which is bolstering its store private label fashion brands. Amazon.com is by some forecasts expected to surpass Macy’s as the largest online seller of clothing next year.

Under Lundgren, Macy’s hasn’t been sitting still and has been looking for opportunities to boost sales, from buying upscale beauty brand Bluemercury to launching its own off-price stores called Macy’s Backstage. But since this past May, it announced it has to accelerate its efforts to get shoppers excited.

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