Yuki Iwamura/AFP/Getty Images
A shopper carries a Macy's bag during “Black Friday” (the unofficial start of the holiday shopping season) on November 24, 2023 in New York.
CNN
—
Macy's is getting a new, smaller but more luxurious look, with the aim of turning the struggling retailer around and keeping the 150-year-old brand responsive to shoppers' rapidly changing demands. ing.
First, Macy's needs to downsize. The company plans to close 150 underperforming stores, 50 by the end of 2024 and the remaining 100 over the next few years. The company announced it would prioritize investments in only 350 Macy's stores by 2026.
Second, the company will focus on its upscale Bloomingdale's and Bluemercury brands, which have outperformed the Macy's brand. The company plans to open more smaller versions of these stores over the next few years.
The move is part of what the store is calling a “bold new chapter” in a turnaround aimed at fending off activist investors and boosting the moribund company's stock and sales.
Macy's and the entire department store industry were hit on all fronts. Department stores are being squeezed by the rise of Amazon, discount chains like TJ Maxx and the growing influence of online brands.
Macy's stock has fallen 75% from its peak of $73 per share in 2015. Since then, the company has closed nearly 300 stores, or nearly a third of its footprint, but still has about 700 stores open across all its brands.
Macy's announced last month that it would lay off about 2,350 people, or about 3.5% of its workforce.
The company's struggles have drawn the attention of activist investors. Last month, Macy's rejected an unsolicited $6 billion bid from an activist investor to take the famous department store private. The activist group is attacking Macy's again, launching a proxy fight for control of the company's board of directors.
Macy's (M) stock fell slightly in pre-market trading.
New CEO Tony Spring said in a statement that the “bold new chapter,” with the full support of the company's board of directors, was developed after extensive market research and will reinvigorate the Macy's brand. Then he said.
Specifically, the new strategy will focus on improving Macy's digital store and streamlining its offerings.
“This bold new chapter serves as a powerful call to action,” Spring said in a statement. “We're challenging the status quo and creating a more modern Macy's.”
Spring said Macy's will improve the shopping experience for its customers by focusing on the brands and products that shoppers say they want. Luxury brand Macy's, which has struggled with rising prices over the past few years, also said it would focus on “compelling value.”
That should lead to sustainable profit growth over the long term, Spring predicted.
The company announced it would close Macy's stores while opening new luxury brand stores.
Macy's announced that it will open 15 new Bloomingdale's stores and 30 new Blue Mercury stores over the next three years. The company also plans to renovate 30 existing Bluemercury stores.
As inflation has skyrocketed over the past few years, the retail market has splintered. Lower-end stores focused on cost-cutting, such as Walmart, performed particularly well. But the same goes for luxury brands, where shoppers with means are able to sustain their spending despite higher prices.
This is a developing story and will be updated.
