As part of its yearly review process, Macy’s plans to shutter one Bloomingdale’s store and 28 of its namesake department stores. The retailer operates approximately 680 department stores as well as 190 specialty shops, CNBC reported.
Macy’s has been seeking to win back shoppers who are turning more to eCommerce and frequenting shopping malls less often. The retailer has been working to bolster its product offerings and to revamp its store designs. Macy’s has also been testing out experimental store formats like Backstage, in an attempt to compete with discount stores like T.J. Maxx.
The retailer’s stock had risen as high as 7 percent in premarket trading on Wednesday (Jan. 8) following a report that holiday sales numbers were higher than expected. However, those gains were reduced as the market opened on news of the stores being shuttered. The retailer’s shares closed up 2.4 percent.
Department stores have been having a rough time overall. Sales in the industry dropped 1.8 percent from Nov. 1 through Dec. 24, per Mastercard Spending Pulse. Some merchants were providing large discounts to bring consumers into their locations over the holidays.
Stores that sell clothing have reportedly been especially challenged in recent quarters. Many industry observers foresee that department store operators will have to close more stores to become more profitable.
As previously reported, holiday sales at Macy’s fell, but not to the extent that analysts had forecasted. The retailer’s same-store sales slipped 0.6 percent at licensed and owned stores in November and December. Same-store sales at owned stores, however, dropped 0.7 percent over that time. Analysts had been calling for a 1.75 percent fall in same-store sales for the fourth quarter, per a Refinitiv poll.
CEO Jeff Gennette said, per past reports, “Macy’s performance during the holiday season reflected a strong trend improvement from the third quarter. Customers responded to our gifting assortment and marketing strategy, particularly in the 10 days before Christmas.”