The American major department store, Macy’s, announced the closing of additional stores early this year. This is part of their initial statement that it aims to shut down more than a hundred shops by 2023. Furthermore, this is their way to exit from underperforming shopping malls and reduce the real estate conglomerate with lesser value now than before.
As the closures occur, it is also investing in promising malls all over the US and developing in off-mall opportunities. The liquidation of sales is already ongoing in some of the affected areas. Last year, it terminated the operation of 30 branches. This year, there will be more than 30 locations added to the list.
The Slow Retail Trend
These closures of Macy’s will be joining the surplus of retail organizations that have operated back in the market in the current years. Last year, retail firms from department stores to boutique apparel chains declared more than 10,000 closures as released by a real estate company, CoStar Group.
Several mall owners have been very busy filling a number of empty spaces since more and more brands are closing down. There’s just too much pressure that some could no longer handle. The number of mall owners who have filed for Chapter 11 bankruptcy protection is increasing since November last year.
As stated on their website, Macy’s currently has more than 500 department stores, about 40 plus Bloomingdale’s shops and Bloomingdale’s outlets, and over a hundred Bluemercury shops.
Avoided Bankruptcy
The firm has implemented a couple of financial recovery schemes, such as reinforcing its CRMs and loyalty programs, creating quality fashion, and developing a digital presence. In addition, it intends to optimize its retail portfolio and restructure its cost base to conserve its funds.
During the second quarter of last year, Macy’s was able to get away with bankruptcy after receiving more than $4 billion in financing. But the firm announced that it needs to retrench over 3,000 staff due to the ramifications of the pandemic. After the revelation, such a move ignited criticism that the firm’s upper management got $9 million in bonuses, weeks following the retrenchment statement.
One of the oldest department store chains in the US
The firm’s losses reduced to $91 million in the current quarter, which is already a huge turnaround compared to their loss in the second quarter last year which was $431 million, and more than $3 billion in the initial quarter the same year. Its online shops continue to soar and help in recovering the enormous loss brought by the pandemic-related closures. Macy’s is still experiencing a subtle sales decline since people are minimizing their budget on accessories and clothes during this time.
According to the firm’s top official, they are hopeful that its digital sales will generate $10 billion in three years and that digital shopping will be more profitable. Also, they have declared that 2021 will be the year for rebuilding. It is now trying out small-scare store formats that are off-the mall in some locations such as Atlanta, Washington, DC, and Dallas.
