Macy’s plans to close 150 of its stores as it focuses on its luxury brands.
The department store chain made this announcement Tuesday (Feb. 27) as it released quarterly earnings, saying that the closures would affect about a third of its stores and play out over the next two years.
According to the company’s announcement, the closures will include about 50 by the end of Macy’s fiscal year. It’s part of a larger plan that also involves “prioritizing investment in approximately 350 go-forward locations and the continued expansion of small-format stores,” the company said.
This follows the company’s announcement in October that it plans to triple the number of its small-format locations by 2025.
In addition, Macy’s plans to capitalize on the success of its Bloomingdale’s and Bluemercury brands by opening 15 new Bloomingdales and 30 new Bluemercury stores.
The move follows a quarter in which Macy’s and Bloomingdale’s both saw a decrease in sales, while numbers were up for beauty products brand Bluemercury.
“The shopper is still under pressure,” said CEO Tony Spring, per a Bloomberg News report. “Inflation is still up even if it’s not as high as it was. We’re going to have to fight for our fair share and fundamentally reposition the business for growth.”
As PYMNTS reported Tuesday, this year will likely see the price of goods and services continue to strain consumers, with 62% of Americans saying they live paycheck to paycheck, compared to 60% a year ago.
“This increase suggests the rising cost of living may be taking its toll on consumer finances — including high-income consumers,” the report said. “More than one-third of those annually earning more than $200,000 saying they live paycheck to paycheck.”
The store closure announcement comes weeks after Macy’s said it was cutting 3.5% of its workforce as it aims to streamline operations.
The decision to cut jobs and close stores comes as Macy’s is facing pressure from activist investors who have launched a $5.8 billion buyout bid for the chain. It is not clear how many jobs the new round of store closures will impact.
The company is taking a $50 million termination cost connected to the closings, according to a Securities and Exchange Commission (SEC) filing.
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