The reasons behind Macy’s decision to close 150 department stores over the next 3 years

Macy’s, a hallmark of retail in the United States, has been forced to shutter many locations as the company attempts to adjust to the surge in e-commerce. On 27 February, the company’s CEO, Tony Spring, unveiled a new strategy, ‘A Bold New Chapter,’ that aims “to challenge the status quo to fundamentally reposition the company, enhance the customer experience, deliver growth and unlock shareholder value.” This plan comes after the company ended 2023 with a lower profit margin than in 2022.

One aspect of the plan that did not receive much airtime during the quarterly earnings meeting was that 150 stores are slated to be closed over the next three years to align the company’s offering with customer demand. The closures were confirmed, but little information was provided about which locations will be affected. What has been said by the company is that the locations that will close have been deemed “underproductive,” and fifty will close by the end of the fiscal year. To offset the loss of these larger stores, the company is also “prioritizing investment in approximately 350 go-forward locations and the continued expansion of small-format stores.”

Closures that have been made public

In a company memo obtained by The Wall Street Journal, Macy’s plans to lay off 3.5 percent of its workforce, or around 2,350 jobs. The layoffs were slated to begin in late January.

In addition to eliminating workers, the company plans to invest in automation supply chains, including updating digital features in online shopping and incorporating screens to improve the visual appeal of stores.

However, there are five locations that have been identified for closure this year:

None of the closures have taken place.