Macy’s Inc. (NYSE:M) has announced that it will close 125 stores in the next there year as well as cut around 2,000 corporate jobs as it shutters its Cincinnati headquarters as well as the San Francisco tech offices. The company will shift all its headquarter roles to New York.
Macy’s to shut 125 underperforming stores
The department store chain indicated that it is planning to exit weaker shopping malls and shift to opening small-format stores in strip centers. The company has closed over 100 stores since 2015. Macy’s CEO Jeff Gennette stated that the liquidation has already commenced targeting around 30 underperforming stores in low-tier shopping malls.
Last month the company identified the stores earmarked for closures in the first round, which are from 19 states from Florida to California even as far as Hawaii. One Bloomingdale’s store in Florida is equally shutting.
Some of the stores to shut include Summersville Towne Centre and Horton Plaza Park in California, Westfield Meriden in Connecticut, Pompano Citi Centre, Seminole Towne Centre, Indian River Mall and The Falls Mall (Bloomingdales) in Florida, the Gallery at South DeKalb and Macon Mall In Georgia as well as the Kings’ Shops in Waikoloa Village in Hawaii.
Macy’s struggling due to the rise of online shopping
Macy’s has been struggling as consumers buy more online with very few customers visiting stores. The chain has continued to struggle even after it shifted its focus and spending on e-commerce. Department stores in the US have been struggling following the growth of Amazon.com Inc. (NASDAQ:AMZN) and off-price chains such as T.J Maxx.
Gennette is still optimistic that department stores are still important with the rights strategies. He says Marcy’s goal is to revitalize and reclaim what department chains should be. He says that there viability in having all brands and categories under one roof.
Following the closure of the stores, the company will realize around $480 in restructuring charges. By the end of 2022, the company expects to save around $1.5 billion yearly, with around $600 million in savings this year.