Macy’s is moving out.
The department store chain is planning to abandon its core position as an anchor tenant at some shopping malls and move into smaller, standalone stores in an effort to regain footing amid the coronavirus pandemic.
With the holiday shopping season approaching, and with malls struggling for business, the company will test several smaller, independent Macy’s stores. The shakeup includes at least one Bloomingdale’s store, CNBC reported.
“We continue to believe that the best malls in the country will thrive,” CEO Jeff Gennette told analysts Wednesday, according to CNBC. “However, we also know that Macy’s and Bloomingdale’s have high potential (off)-mall and in smaller formats.”
Big department stores such as Macy’s have always been a mainstay at malls as they lure retail traffic to smaller shops, kiosks and food courts, providing much-needed financial stability.
But the pandemic has crippled what had been a surefire business model as many shoppers bypass malls in favor of buying online. High-end department stores in particular have struggled more than other retailers including Walmart and Target.
Other big-name stores are either struggling to survive or appear ready to throw in the towel.
Neiman Marcus, Stage Stores and others filed for bankruptcy in 2020, and Lord & Taylor announced last week it is liquidating its remaining 38 stores, according to CNBC. Bankruptcy negotiations at JCPenney have also reportedly hit a snag.
As for Macy’s, executives said the company is monitoring its competitors and considering whether to speed up a plan to shutter 125 stores during the next three years.
Macy’s had 771 total stores, including Bloomingdale’s and Bluemercury, during the second quarter that ended in June, CNBC reported.
On Wednesday, the retailer reported online sales grew 53% from where they were in 2019, leading to a boost in overall revenue that surprised Wall Street.
Macy’s shares jumped 8% Thursday.
The recovery at storefronts, however, remains weak with sales expected to drop by about 20% during the fall, according to CNBC.
Other troublesome signs for the company have been on the horizon for months.
Macy’s announced in June that it planned to cut 3% of its workforce, including 3,900 corporate jobs, which would save the company about $365 million in fiscal 2020.
Visit The Atlanta Journal-Constitution (Atlanta, Ga.) at www.ajc.com
Distributed by Tribune Content Agency, LLC.