Macy’s, the iconic department store chain, announces a bold transformation plan, opting to shutter nearly a third of its namesake U.S. stores, totaling 150 closures. This strategic move aims to counter the recent buyout overtures from activist firms while reshaping its retail landscape. The decision, part of an expansive real estate strategy, anticipates a freeing up of assets ranging between $600 million and $750 million through 2026.
In the face of a $5.8 billion buyout offer from Arkhouse Management Co. and Brigade Capital Management, Macy’s resisted the proposal but confronts activist persistence. As a countermeasure, the company foresees the addition of 15 new Bloomingdale’s and 30 Bluemercury locations by 2026, steering towards heightened growth of its upscale brands.
Macy’s fourth-quarter results and the unveiling of its new real estate strategy coincided, with an announcement that it would absorb a $50 million charge related to employee termination costs due to the store closures. Macy’s CEO Tony Spring projects this transformative initiative to position the company strategically, stating that it’s “about having the right stores in the right geographic parts of the country where consumers are still shopping.”
While Macy’s saw a decline in same-store sales at its namesake brand, Bloomingdale’s, and Bluemercury exhibited more resilient performances during the holiday season. The brand’s focus on streamlining operations aligns with a broader industry challenge of adapting to evolving consumer preferences amid a surge in online and off-mall shopping.
