Study: Macy's likely to shutter most stores in Midwest
Macy’s earlier this month announced the closing of 100 full-line stores by early 2017, targeting locations where the value of the real estate exceeds their value as retail stores. Data analytics company 1010data has figured out which stores are likely on that list, using its Local Marketing Intelligence (LMI) tool.
Most are in the Midwest, including Milwaukee, which saw a 14% loss from 2014 to 2015, Pittsburgh (12% loss), Detroit (8.2% loss), St. Louis (6.2% loss), Columbus (7.5% loss), Cincinnati (5.9% loss) and Cleveland (5.7% loss), according to preliminary results emailed to Retail Dive. Other Macy’s stores experiencing major losses include Philadelphia, Hartford, CT and Daytona Beach, FL.
1010data looked at basket size, trip frequency and market share to identify problem areas, the company said.
While it’s true that 1010data crunched the numbers, many veteran retail observers aren't surprised by their findings, considering Macy’s is generally viewed as over-stored nationwide.
Nick Egelanian, president of retail development consultants SiteWorks International, told Retail Dive he predicts Macy's will eventually become a smaller department store chain, with strongholds in New York and the western U.S.
“It’s the collector of all the department stores that had been losing market share over the years,” Egelanian said. “Sometimes you think you’re beating your competitors, when you’re actually buying the remnants of their dying chains.”
That's particularly true in the Midwest. A few decades ago, Macy's made its mark by moving in on cities like Milwaukee, Chicago and metro areas in Ohio to swallow up local department stores like Marshall Field's.
Macy's has said only that it will announce which specific stores will close at a later date, and that associates displaced by the closings may be offered positions in nearby locations. Eligible full-time and part-time associates laid off due to store closings will be offered severance benefits.
In tandem with the closures, which will winnow the number of Macy's full-line stores to 575, the department store chain pledged to "heighten" its brand with exclusive products and an upgraded shopping experience, adding it will reallocate investments to its highest-growth-potential store and digital businesses. Macy's said it will invest in capacity-building across its sites and apps, targeting improvements in natural language search, faster page loading and more efficient procedures for placing and fulfilling orders. The company also will overhaul its Buy Online Pickup in Store offering, introduced in 2013, to boost speed and convenience.
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