Macy's To Close 150 Stores, Signals Pivot To Luxury

NEW YORK (AP) — Macy’s will close 150 stores over the next three years and 50 by the end of 2024, the department store said Tuesday after posting a fourth quarter loss and declining sales.

At the same time, the company signaled a pivot to luxury.

It said it would open 15 of its higher-end Bloomingdale’s stores and 30 of its luxury Blue Mercury cosmetics locations.

While adjusted net income and revenue topped Wall Street expectations, Macy’s offered a muted outlook for the year.

Shares were essentially flat before the opening bell.

The department store chain faces a proxy fight from Arkhouse Management which nominated a slate of nine directors for election to Macy’s board last week.

Last month, Macy’s rejected a $5.8 billion takeover offer from the hedge fund and Brigade Capital Management, an investment manager.

Activist investors and pressure to increase sales are just two critical issues facing new CEO Tony Spring, who succeeded Jeff Gennette earlier this month.

“We are making the necessary moves to reinvigorate relationships with our customers through improved shopping experiences, relevant assortments and compelling value,” said Spring in a statement.

Even before the pandemic, department stores were facing intense competition from online rivals. Neiman Marcus and JCPenney both filed for Chapter 11 bankruptcy protection.

Consumers have proven resilient and willing to shop even after a bout of inflation, though behaviors have shifted, with some Americans trading down to lower-priced goods.

Macy’s is maneuvering to shore up sales by accelerating the expansion of small-format stores that can provide more convenience to its customers.

It announced plans in October to add up to 30 small-format locations through the fall of