Macy's Announces Closure of 55 Stores by 2024
Store Closures as Part of Business Revamp
Macy’s has revealed plans to close 55 stores by the end of 2024. This decision is part of the company's ongoing efforts to revamp its business. Initially, the company had planned to shut down 50 underperforming stores by the end of the year, which was a part of the total 150 locations slated for closure within three years. However, the new plan involves closing an additional five stores before 2025.
Speculated Store Locations
Although the specific locations of the stores to be closed have not been disclosed, there are rumors that the list might include a store in Newington, New Hampshire, another in Traverse City, Michigan, and a third in WestShore Plaza mall in Tampa, Florida. These stores are expected to close after the winter holidays.
Reasons for Macy's Struggles
Neil Saunders, a GlobalData Retail analyst, attributed the company's struggles to the quality of the stores and the product assortment. Over the years, customers have deserted Macy’s, resulting in declining sales and store productivity. All the performance metrics have trended in the wrong direction.
Efforts to Revive the Brand
The announcement of these closures follows Macy’s recent decision to divert funds to its in-house brands in an attempt to revive the brand. The company has reintroduced or launched several brands, including On 34th and State of Day, as part of its rehabilitation efforts. It also plans to launch a men’s collection by the end of the year, with a new kids’ brand to follow.
Focus on High-Margin Luxury Products
Macy’s rebranding efforts are not limited to reviving old brands. The company is reportedly focusing more on its high-margin luxury products to attract customers with more disposable income. The company plans to concentrate on designer fragrances, which are more affordable than high-end handbags, yet feature sought-after brands like Chanel and Dior.
Expansion of High-End Cosmetic Products
Some Macy’s stores already stock high-end fragrances from brands like Tom Ford, Creed, and Cartier. The company has announced that it will have 42 outlets selling its high-end cosmetic products, with a focus on scent, by the end of 2024. This move is part of its aim to increase the availability of designer fragrances.
Store-in-Store Concepts
In addition to these changes, Macy’s will soon introduce store-in-store concepts, similar to Target’s Ulta strategy and Kohl’s successful Sephora endeavor.
Bottom Line
The decision by Macy's to close 55 stores by the end of 2024 is a significant move in its ongoing efforts to revamp its business. While the company faces challenges, it is making strides to revive its brand and attract a more affluent customer base. The focus on high-margin luxury products and the introduction of store-in-store concepts could potentially turn the tide for this faltering brand. What are your thoughts on these changes? Share this article with your friends and let us know your views. Don't forget to sign up for the Daily Briefing, which is available every day at 6pm.
