Macy’s Inc. announced on Tuesday that it will close 45 of its department stores in 2021. The closures are part of a restructuring plan unveiled in February of last year that would have the retailer shutter 125 underperforming stores over the next three years.
Macy’s Has Plan to ‘Rightsize’ Store Fleet
Roughly 30 Macy’s stores closed for good in 2020. Macy’s has also said it plans to eliminate about 2,000 corporate positions. And it will close multiple offices, Fox Business reports.
“As previously announced, Macy’s, Inc. is committed to rightsizing our store fleet by concentrating our existing retail locations in desirable and well-trafficked A and B malls,” a spokesperson said in a statement. “To that end, we announced several store closures today that align to the guidance we provided in February 2020. These closures bring us closer to achieving the right mix of mall-based stores.”
Macy’s hatched its restructuring plan before the coronavirus pandemic hit, shutting down many retail stores.
In September of 2020, the retailer said it would begin pursuing a strategy of smaller stores and pulling up stakes in underperforming malls. It also laid off 3,900 employees due to the pandemic’s effects. (However, it gave $9 million bonuses to top executives shortly thereafter.)
By November, Macy’s was reporting a quarterly sales decline of over 20%. Digital gains failed to make up for the losses in foot traffic at its stores.
Retailer Narrowly Escaped Bankruptcy
Looking ahead, the department store is trying to bolster its customer loyalty efforts and accelerate its digital growth as it resets its cost base to conserve cash.
This past June, Macy’s narrowly avoided bankruptcy by securing $4.5 billion in financing. That included $1.3 billion of senior secured notes and a $3.15 billion asset-based credit agreement.
Macy’s store closures come after a year in which other department stores, such as Neiman Marcus, Lord & Taylor and J.C. Penney, filed for bankruptcy.
The retailer runs 544 Macy’s locations, plus 34 Bloomingdale’s stores, 19 Bloomingdale’s outlets and 166 Bluemercury shops, it states on its website.
A list of the Macy’s locations to close will be available on the department store’s website Wednesday.