Mass Closures of Macy's Stores - 125 Stores Closing. What Should You Expect?

Macy's, a well-known big-box retailer in the United States, has announced plans to close 125 stores in the next three years, representing nearly a fifth of their U.S. stores by the end of 2023.

Photo byMike Mozart/Flickr

Macy’s, the iconic big-box retailer, has recently announced plans to close 125 locations in the U.S. by 2025, a move that will affect 18 different states. The closure of 33 stores by the end of December 2022 will have a significant impact on Macy’s operations, and on the retail industry as a whole.

California and Washington state will have three locations permanently shuttered, while the other 16 states with Macy's store closures are New Jersey, Florida, Texas, Hawaii, Florida, North Carolina, Georgia, Connecticut, Massachusetts, Maryland, New York, Illinois, Kentucky, Ohio, Pennsylvania and Indiana.

In this article, we will explore the reasons for these closures, the impact on the company and the retail industry, and the potential long-term implications of Macy’s store closures.

Reasons for Closures

Macy’s has stated that the closures are part of their plan to optimize and reposition their store fleet to more effectively support their omnichannel sales growth and expand market share. In addition to this, the company has seen a significant shift in sales from physical stores to online fulfillment, and recognizes that their digital performances are stronger in markets where they have stores. As a result, the company aims to reduce their store inventory from 777 to 650 by the end of 2023.

Shift to Online Sales

Macy's has shifted its sales focus to prioritize online fulfillment, recognizing that their online sales tend to be higher in areas where storefronts also exist.

In an earnings conference call, CFO Adrian Mitchell said:

Digital performance is stronger in the markets where we have stores.

Despite this shift, Macy's has stated that stores remain an integral part of their omnichannel retail ecosystem, and that they are "optimizing and repositioning" their store fleet to support their omnichannel sales growth and expand market share.

Impact on Macy’s and the Retail Industry

The impact of the store closures on Macy’s has been significant. The company’s stock price has dropped 6.73 percent since the beginning of the year and year-over-year sales declined by 3.1 percent in the third quarter of 2020. Despite this, Macy’s executives remain optimistic that the move to close stores is putting the company in a healthier financial position.

The store closures will also have a significant impact on the retail industry as a whole. Macy’s is one of the largest department store chains in the U.S., and the closures of these stores could have a ripple effect on other retailers, as well as on the economy more generally.

Long-term Implications

The long-term implications of Macy’s store closures are difficult to predict. It is likely that the closures will have a negative impact on the retail sector in the short-term, as customers will have fewer physical stores to shop at. However, Macy’s has stated that stores remain an integral part of their omnichannel retail ecosystem and that they are optimistic about the company’s future. It is possible that, in the long-term, the closures will result in a more efficient and profitable retail industry, as companies focus on online sales and omnichannel retailing.

Conclusion

Macy’s has recently announced plans to close 125 stores in the U.S. by 2023, a move that will have a significant impact on their operations and on the retail industry as a whole. The company has stated that the closures are part of their plan to optimize and reposition their store fleet to more effectively support their omnichannel sales growth and expand market share. The long-term implications of these closures are difficult to predict, but it is likely that the closures will have a negative impact on the retail sector in the short-term.

What Are Your Thoughts?

Have you ever experienced the closure of a Macy's store in your community? How did it impact you and your community? Do you think the shift to online sales will be successful for Macy's in the long term? How do you think the closure of Macy's stores will impact local economies?

Let me know what you think in the comments below!