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The Spokesman-Review Newspaper
Spokane, Washington  Est. May 19, 1883

Macy’s to close 150 stores as it bets on luxury brands

The Macy’s store in downtown Spokane is shown on Jan. 6, 2016. The store closed in 2016. The company closed a second Macy's in NorthTown Mall in 2021.   (Dan Pelle/The Spokesman-Review)
By Aaron Gregg </p><p>and Jaclyn Peiser Washington Post

Macy’s plans to close 150 department stores and prioritize its luxury brands as it seeks to reinvent itself amid flagging sales.

The company plans to have a smaller footprint of 350 locations as it trims the “unproductive” stores, it announced Tuesday. It also expects to expand its luxury store footprint by 20 percent with 30 new Bluemercury stores and 15 stores under the Bloomingdale’s umbrella, including Bloomingdale’s outlets and smaller Bloomies locations. For the Macy’s branded stores, the company plans to invest more in smaller locations. The company has 12 small-format Macy’s stores and has previously said it will open 30 more over the next two years.

Macy’s has not yet publicly identified specific stores to be closed. But the 150 stores generate less than 10 percent of the company’s overall sales even though they represent 25 percent of the company’s gross square footage, CEO Tony Spring said during a call with analysts.

“We have to focus on making sure that we have the best stores, not the largest number of stores,” Spring said.

Executives say the new stores will have new merchandise assortments and better visual presentations. They’re planning to increase staffing in some specific areas, such as women’s shoes and ready-to-wear.

With Bluemercury, Macy’s is betting on one area of discretionary spending that seems to have held up. The beauty sector saw its sales rebound in recent years, with retailers such as Ulta and Sephora continuing to report positive results in 2023.

Overall sales at Macy’s namesake department stores were down 2.5% in the fourth quarter of 2023 compared with the same period a year earlier. Bloomingdale’s and Bluemercury did well by comparison, gaining 3.5% and 7.8% , respectively.

Like other retailers, the company has suffered from a “middle-market” pullback among consumers, said Neil Saunders, retail analyst with GlobalData. But the company has also suffered due to its “poor presentation and assortments,” Saunders said, and it has lost market share in core areas of its business, including apparel and home.