Macy’s is shuttering "28 Macy’s locations and one Bloomingdale’s store in the coming weeks," a company spokesperson told Retail Dive in an email on Wednesday.
"We will provide an update on our growth strategy and three-year plan, including details on our stores segmentation strategy, at Investor Day on February 5, 2020," the spokesperson said.
The department store retailer also reported Wednesday that store comps on an owned basis fell 0.7% over the nine-week holiday period ended Jan. 4, as comps on an owned plus licensed basis fell 0.6%. The impact on comp sales from "departments licensed to third parties" was growth of 0.1%, according to a company press release.
A year ago, Macy's embarked on the store segmentation strategy a spokesperson referred to on Wednesday, which entails flagships (including its Herald Square, New York location), magnet stores (dubbed "Growth 150") and neighborhood stores — each with its own customer base, level of investment and potential.
In the email on Wednesday, the spokesperson also noted that "Macy’s, Inc. regularly reviews its store portfolio," and in November, CEO Jeff Gennette hinted strongly that stores would close this year. The company has wasted little time in doing so, although a year ago, it told Retail Dive that the drastic reduction in its footprint announced in 2016, the closure of 100 stores across the country, was complete.
The company didn't immediately respond to Retail Dive's request for more specifics on which stores will shutter, although they include one in Cincinnati, home to one of the company's headquarters, according to a notice filed Jan. 6 with the Ohio Department of Job and Family Services. According to a roundup of local reports compiled by USA Today, others include a store in Connecticut, four in Florida, two in Georgia, one in Idaho, two in Illinois, and three in Washington state, among others.
The problem, reflected in the department store's weak holiday performance, is that there remain too many underperforming stores, according to GlobalData Retail Managing Director Neil Saunders, who said that the magnet stores and e-commerce "saved Christmas for Macy’s."
"Macy’s does deserve some credit for preventing a worse result," he said in emailed comments. "The stores where it has been focusing investment – the so called Growth150 group – looked very festive and showcased some solid ranges, especially within gifting. The results from this segment were relatively strong. Online performed well too, thanks to a reasonable assortment and convenient delivery and pickup options."
Otherwise, though, performance was weak, he warned, calling most of Macy's legacy stores "shabby." Without the kind of investment that Macy's is bringing to its growth stores, the announced closure of weaker stores will be just the beginning, Saunders warned.