Macy's says it will close more stores by the end of 2024 than originally planned as the company continues its "Bold New Chapter" strategy with a greater focus on luxury growth and modernizing operations.
The update came from Macy's Chairman and CEO Tony Spring, who spoke during a third-quarter investor call Wednesday.
NBC News reported earlier this year that the retail giant's portfolio of stores -- which also includes Bloomingdale's and Bluemercury beauty and skincare spas and stores -- would close 150 stores by 2026, with approximately 50 to 55 store closures planned for 2024.
At the same time, the retailer said it would upgrade 350 stores, starting with 50 stores in 2024.
Macy's now expects to close roughly 65 locations by the end of 2024, Spring said, with the additional stores expected to close after the holiday. said.
Spring said the closures fall in line with the company's plans to accelerate "luxury growth." Spring specifically called out new brands introduced into stores, including SKIMS and Jenni Kayne as successful, as well as improvement in designer handbags like Tory Burch, Coach, Longchamp and Rebag, Macy's new, preowned luxury accessories launch.
Earlier this year, a number of "small-format" Macy's stores across the country opened, including some in the Chicago area. The stores, typically in strip malls and shopping centers as opposed to large malls, are roughly one-fifth the size of its traditional stores. As of Wednesday, 24 locations across the U.S. had opened.
Local
The retailer also opened small format Bloomingdale's stores, called "Bloomie's," including one in Westfield Old Orchard Mall in Skokie.
It wasn't immediately clear which Macy's stores would be slated for closures, and Macy's did not respond to NBC Chicago's request for comment. According to the website, there are 19 Macy's stores in Illinois.
Feeling out of the loop? We'll catch you up on the Chicago news you need to know. Sign up for the weekly> Chicago Catch-Up newsletter.
Macy's delays earnings after employee hid $151M
Macy's had postponed releasing its full third-quarter earnings late last month until Wednesday, after completing a probe of a rogue employee who hid $151 million in delivery expenses over a span of nearly three years. According to Spring, the intention of the employee was to cover up the mistake and not steal the money.
The employee told investigators that an error was initially made in accounting for small parcel delivery expenses, and then the person intentionally made errors to hide the mistake, according to source close to the probe who wanted to remain anonymous because of the private nature of the information.
While the company said Wednesday the former employee’s obfuscation would have no material impact on company finances, it had to revise years of financial statements. Additional details of the probe were aired as the company’s third quarter results and mixed outlook sent shares down by as much as 11% Wednesday.
Macy’s reported falling profit and sales with the department store chain wrestling with cautious spending by customers, rising competition and sluggish demand for cold-weather goods. The New York retailer raised sales expectations for the year Wednesday, but lowered profit projections.
At the first 50 stores that Macy’s has upgraded, same store sales rose 1.9%, officials said, with the retailer attempting to find a formula to reinvigorate sales. In the past year it has tested different tactics in dozens of stores, like more salespeople in fitting room areas and shoe departments. The so-called “First 50” strategy is also implementing more visual displays at the first stores to be overhauled.
This fall, sales of cold weather items have been challenging because of unseasonably warm weather, the company said. It will be hard to make up for those losses because the season between Thanksgiving and Christmas is five days shorter than last year, Macy’s said.
The company now expects earnings per share to be $2.25 per share to $2.50 per share for the year, down from its previous estimate of $2.34 to $2.69. But it projected sales of $22.3 billion to $22.5 billion for the year, up from its previous forecast of $22.1 billion to $22.4 billion.
“We are encouraged by the consistent sales growth in our Macy’s First 50 locations and the strong performance of Bloomingdale’s and Bluemercury,” Spring said. “Quarter-to-date, comparable sales continue to trend ahead of third quarter levels across the portfolio.”
