Macy's To Shut 100 Stores, Revamp Outlets

Andrew Cummings
August 14, 2016

Macy's plans to close about 100 of its 675 stores nationwide, the company announced Thursday as part of the company's effort to increase online shopping.

Macy's closed 40 stores earlier this year, including its stores at the Roseburg Valley Mall in Roseburg and the Pony Village Mall in North Bend. Especially those store with low profitability, stores with fewer sales and of course stores that has no return on investment and lastly stores that does not reflect the Macy's endeavors and aspirations of the Macy's Brand. That's down about 23 percent from the January 2007 peak of 868 total. Macy's said employees at stores slated for closure may be offered positions in nearby stores "where possible", Macy's said.

Gennette said they are closing a large number of stores "proactively" to better invest in the most profitable and "highest-potential locations". "The locations of the 100 stores to be closed will be announced at a later date, once the company makes final decisions".

Analysts said the store closures and other recent initiatives were steps that would help Macy's recover but some said there were still issues that needing addressing.

Macy's is examining its portfolio of real estate in big cities.

Macy's sales fell almost 4.0 percent during the second quarter, it said on Thursday, but that was better than analysts had expected and helped to send its shares and those of other department stores higher. That compares with $217 million, or 64 cents per share, a year earlier.

Macy's shares jumped 17 to $39.78 by noon, as investors celebrated positive earnings reports by Kohl's Inc. and applauded Macy's plan to shutter about 15 percent of its department store doors.

The stock in the company has fallen 50 percent in the last 12 months, the Associated Press reported.

In May, Macy's reported its steepest quarterly sales decline since the Great Recession.

Furthermore, Macy's reported that same-store sales decreased by 2% when compared to past year, but that was better than the 4.4% drop analysts were forecasting.

Macy's has been suffering from declining tourist traffic in its more urban stores that rely more heavily on overseas travelers.

"This country is overstored given evolving customer shopping habits", Macy's Chief Financial Officer Karen Hoguet said during a call with analysts discussing the company's second-quarter financial results.

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