It really sounds like the majority of this list is stores outside of their control. Most of these stores are in malls where Macy's could spend millions of dollars on renovations, bring in the best buyers and merchants to cater the assortment to the clientele, and it would not matter at all because the rest of the mall is comatose. I am concerned as I shared that there are stores missing from this list as well. Consolidation of two store malls will still happen except in the absolute flagships as now even "A-tier" malls begin to embrace the profits of reducing their retail footage and adding residential or office components. So there are likely dozens of stores to be added to the closure list and those will be in malls where they do want to be long term.babs wrote: ↑March 25th, 2024, 10:11 am If they close all the stores on this list, they will continue to lose sales. With no stores in a market, they've admitted online sales shrink as well so they will lost that revenue. Looking at the three Oregon stores on the list that I am most familiar with. Closing the Bend store in a fast-growing market with lots of high-income households but a huge tourist business is flat out dumb. They have failed to invest in that store and probably should just relocate it to a busier area with a modern store.
The Salem store is old and a dump, a classic example of underinvestment in their stores. They should close this store and open a new small format Macy's in Kaiser Station.
The Tanasabourne store is a newer store that if opened today would likely be a Macy's Marketplace store. It's become a neglected and a dump. Plus, half of the first floor is already a Backstage store and lots of the store is also taken up by Last Act. In reality this already is a small format store with the reduced floor space for regular merch. Closing this store in a fast-growing area just shrinks their market share.
Neglect and underinvestment is the hallmark of Macy's. I get they want to shrink down to fewer but better maintained stores but I have yet to see a chain shrink to success. If someone can name where this strategy has worked, I'd love to know.
I tend to agree on the neglect and underinvestment. This new CEO is claiming that he wants to address that problem, but it seems they don't have the ability to fund remodeling and staffing expansion for every store even though they reportedly had cut to the point of being all profitable. The fact that they were able to cut all the unprofitable stores without a bankruptcy is remarkable and might be a good example of shrinking to success if the chain was actually high flying elsewhere.
This creates the quandary they're in: allegedly these stores combined make up 25% of the store base but deliver only 10% of the sales. By just wiping these out they save on remodeling costs and escape from a fate that is outside of their control.
I am concerned however that Macy's control over the industry is nearly zero at this time, and this is where you and I align on the next wave of trying to shrink to success being a problem. So they close the current dying mall stores. But then there will be a next wave of dying malls that will take down another hundred stores and so forth. Will the long overdue investments and remodels actually solve for this problem? And will the small formats actually be profitable and grow sales or turn into money losing return processing centers as the larger formats disappear and potentially push more merchandise out via e-commerce which has a substantially higher return rate? They must have a plan that addresses all of these problems so there isn't another closure wave.
The real challenge is for Macy's to figure out not only how to save themselves, but to deliver enough traffic to sustain the malls they anchor and live up to that term. I am sure there is some "secret sauce" somewhere as all of these retailers do maintain financial databases where they closely track who they "work well with" and who they don't. They have to get to the point where the more successful mall tenants want to be in the same center as a Macy's. They must be able to bring traffic from a greater radius than they currently do into that big mall store. I wish them well but am concerned that I don't hear enough about how to make that happen, and I know for sure that if private equity gets involved then the budgets for everything will be slashed to the bone and no matter what the long term prognosis will be implosion.