Macy’s to close 150 stores as part of major recovery effort | Top Vip News

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Macy’s is getting a new, smaller but more upscale look designed to turn around the struggling retailer and keep the century-and-a-half-old brand relevant to shoppers’ rapidly changing demands.

First, Macy’s will have to downsize. The company will close 150 underperforming stores: 50 by the end of 2024 and the other 100 in the coming years. By 2026, it will prioritize its investment in just 350 Macy’s stores, the company announced.

Second, the company will focus on its successful brands Bloomingdale’s and Bluemercury, luxury stores that have surpassed the Macy’s brand. It will open more smaller versions of those stores over the next few years.

It’s part of a turnaround effort that the outlet calls a “bold new chapter,” designed to fend off activist investors and boost the company’s moribund stock price and sales.

Macy’s and the entire department store industry have been hit everywhere. Department stores have come under pressure from the rise of Amazon, the growing strength of discount chains like TJ Maxx and online brands.

Macy’s stock price has fallen 75% from a high of $73 per share in 2015. Since then, it has closed nearly 300 stores (nearly a third of its locations) but still operates about 700 across its brands.

Last month, Macy’s announced that it was laying off about 3.5% of its workforceor approximately 2,350 employees.

The company’s struggles have attracted the attention of activist investors. Macy’s rejected a unsolicited offer of 6 billion dollars of an activist investor to privatize the famous department store last month. The activist group is giving Macy’s another chance, launching a proxy fight to take control of the board of directors.

Macy’s (METER) shares were down slightly in premarket trading.

New CEO Tony Spring said in a statement that the “bold new chapter,” which has the full support of the company’s board of directors, was developed after extensive market research and will revitalize the Macy’s brand.

In particular, the new strategy will focus on improving Macy’s digital store and reducing its offering.

“A bold new chapter serves as a strong call to action,” Spring said in a statement. “Challenge the status quo to create a more modern Macy’s.”

Spring said Macy’s will improve customers’ shopping experience by focusing on the brands and items that shoppers say they want. And Macy’s, a high-end brand that has struggled as prices have risen in recent years, said it would focus on “compelling value.”

That should lead to sustained earnings growth over time, Spring predicted.

The company said that as it closes Macy’s locations, it will open new stores for its luxury brands.

Macy’s said it will open 15 new Bloomingdale’s stores and 30 new Bluemercury locations over the next three years. It also plans to remodel 30 existing Bluemercury stores.

As inflation has risen over the past two years, the retail market has become divided: Low-end stores focused on cost savings, like Walmart, have done particularly well. But so have luxury brands, as shoppers with means have been able to maintain their spending, despite higher prices.

This is a developing story and will be updated.