On January 9, Macy’s, the iconic American department store chain, announced the closure of 66 additional stores as part of its “Bold New Chapter” strategy. This initiative, aimed at achieving sustainable growth, involves shutting down 150 underperforming locations by 2026. In New York City, the closures will affect two stores in Brooklyn (422 Fulton Street and 2027 Emmons Avenue), one in Queens (88-01 Queens Boulevard), one in the Bronx (404 East Fordham Road), and one in Staten Island (98 Richmond Hill Road), significantly reducing the number of major Macy’s storefronts in the city, excluding the flagship store.
Challenges in the Evolving Retail Industry
Macy’s has faced significant challenges in recent years, particularly in the mid-priced department store segment. In a statement, Tony Spring, Macy’s Chairman and CEO, remarked, “Closing any store is never easy, but as part of our Bold New Chapter strategy, we are closing underproductive Macy’s stores to allow us to focus our resources and prioritize investments in our go-forward stores, where customers are already responding positively to better product offerings and elevated service.”
The “Bold New Chapter” strategy, unveiled in February 2024, aims to close approximately 150 underperforming stores over three years while enhancing investments in 350 go-forward locations by the end of fiscal 2026. This approach is intended to ensure sustainable and profitable sales growth.
Macy’s investment in the “First 50 Stores” has already yielded success, with sales increasing for three consecutive quarters and customer satisfaction reaching record highs. Building on this success, the company plans to further strengthen its operations in 2025, delivering an enhanced customer experience nationwide. Additionally, Macy’s is reimagining its in-store and online shopping experiences, providing customers with easy access to detailed information about local go-forward stores through tools like the Customer FAQ and Store Locator on macys.com.
Investor pressure also appears to be influencing these decisions. Many investors argue that the real estate value of Macy’s properties exceeds their profitability as operating stores, advocating for broader closures or even full liquidation. Amid this environment, Macy’s is pursuing selective closures while focusing on attracting affluent customers through its premium brands, Bloomingdale’s and Bluemercury.
Nationwide Store Closures
Currently, Macy’s operates 24 small-format stores and over 70 department stores. Among the 66 stores announced for closure, locations include those from the discount-focused Macy’s Backstage chain. The closures are distributed across several states, including eight stores in Florida, nine in California, three in Georgia, four in Michigan, four in Pennsylvania, six in Texas, and three in Washington. Some of these stores have already ceased operations, while liquidation sales are expected to begin soon at others.
Closing underperforming stores is undoubtedly a challenging decision. However, Macy’s remains committed to its “Bold New Chapter” strategy, leveraging this initiative to navigate the rapidly changing retail landscape and establish a solid foundation for long-term growth.