the staff of the Ridgewood blog
Paramus NJ, Macy’s is ramping up its store closure plans, announcing it will shutter 65 locations by the end of the fiscal year—an increase from the 50 closures previously planned. This move is part of a broader strategy to eliminate approximately 150 underperforming stores over the next three years.
The announcement came during Macy’s third-quarter earnings call, where CEO Tony Spring outlined the updated closure plans.
“We now expect to close roughly 65 locations this year,” Spring said. “In line with our typical cadence, closures will occur post-holiday.”
Accounting Scandal and Delayed Earnings Report
Macy’s earnings report was delayed earlier this year after the company discovered an internal accounting issue involving up to $151 million in expenses for small package deliveries.
An independent investigation revealed that a single employee had intentionally made false accounting entries and altered supporting documentation. The company assured stakeholders that the incident, while serious, did not involve theft or impact revenue, cash flow, or inventory.
“We are overhauling our controls over financial reporting to ensure this does not happen again,” said Adrian Mitchell, Macy’s COO and CFO.
Retail Industry Struggles
Macy’s decision to accelerate store closures reflects broader challenges faced by the retail industry. Department stores are seeing fewer shoppers in malls and increased competition from e-commerce platforms.
So far in 2024, U.S. retailers have announced over 7,100 store closures—a 69% increase compared to the same period in 2023. Additionally, 45 retailers have filed for bankruptcy this year, nearly doubling last year’s total of 25, according to research firm CoreSight.
Macy’s Plans for Growth
While shuttering underperforming locations, Macy’s is focusing on expanding its other brands, Bloomingdale’s and Bluemercury. Over the next three years, the company plans to open 15 Bloomingdale’s stores and 30 Bluemercury locations while remodeling 30 existing Bluemercury stores.
Macy’s stock has taken a hit amid these challenges, dropping about 20% over the past year.
Despite the closures and industry struggles, Macy’s is betting on its ability to adapt, prioritizing investments in brands and locations that align with evolving shopping trends. Whether this strategy will pay off remains to be seen as the retail landscape continues to shift.
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Bloomingdales is way better and has the best sales