Many Americans know that numerous malls across the country are facing tough times. This downturn is not only affecting the malls themselves but also the stores within them.
Multiple retail giants like The Body Shop, Express, Rue21, Bath & Body Works, and Foot Locker have been forced to shutter locations or even declare bankruptcy. Now, another significant player in the retail world is following suit.
Details about Macy’s closures
Macy’s has announced that it will be closing 150 of its locations in the coming months. The company has categorized its stores into two groups: “go forward” and “non-go forward” locations. Macy’s plans to invest in new merchandise and improvements for the “go forward” stores, while the “non-go forward” stores are set to close.
During a recent earnings call, CEO Tony Spring provided some context for this decision. “As a reminder, in fiscal 2023, comp sales of Macy’s go-forward locations outperformed non-go-forward locations by approximately 500 basis points, and the four-wall adjusted EBITDA rate outperformed by roughly 950 basis points.
While non-go-forward locations are underperformers relative to the total Macy’s fleet, they are valuable real estate assets. Demand for these properties has been strong.”
The closure of these Macy’s locations will have significant implications for malls and shoppers alike. Here’s what you need to know:
- Impact on Malls: As one of the major anchors in many malls, Macy’s closures could lead to decreased foot traffic and revenue for the remaining stores.
- Real Estate Opportunities: Despite the closures, the real estate assets are valuable, and there is strong demand for these properties. This could lead to new opportunities and developments in these spaces.
- Shopping Experience: Shoppers may need to adjust to the changing landscape of their local malls and seek alternative locations for their favorite brands.
As the retail industry continues to evolve, these changes highlight the importance of adaptability and innovation. Malls and retailers must find new ways to attract and retain customers in an ever-changing market.
By the end of the year, 55 stores will be shuttered, with the remaining locations closing soon after. However, the specific locations affected have yet to be disclosed.
Understanding the Changes
Spring offered some insight into the reasons behind these closures, stating, “Our customer has become more discriminating, which we attribute to ongoing macroeconomic uncertainty and an increasingly complex news cycle.” To adapt to this evolving landscape, the company has implemented several strategic changes.
Adapting to New Customer Preferences
Spring elaborated on the adjustments being made: “We aligned our assortments and shifted our marketing calendar to better balance value and fashion. We enhanced our promotions and delivered more targeted, personalized messages across categories and brands. Additionally, we invested in newness and proven areas of product strength while reducing our exposure to areas of softer demand.”
Macy’s Presence Nationwide
Currently, there are 519 Macy’s stores across the country. In addition to these, the company also owns over 150 Bluemercury stores and 56 Bloomingdale’s locations.
As Macy’s navigates these challenging times, their focus remains on adapting to customer needs and staying ahead in the ever-changing retail landscape.