The entrance to a Macy’s department store.
Jeffrey Greenberg | Universal Images Group | Getty Images
Macy’s has notified the employees at about 45 of its department stores that they will close by the middle of this year, CNBC has learned.
The closures are part of a previously announced plan by Macy’s to shut 125 locations by 2023, which the retailer outlined last February.
“As previously announced, Macy’s is committed to rightsizing our store fleet by concentrating our existing retail locations in desirable and well-trafficked A and B malls,” a spokeswoman told CNBC in a statement.
“To that end, we announced several store closures today that align to the guidance we provided in February 2020,” she said. “These closures bring us closer to achieving the right mix of mall-based stores.”
There are about 1,000 malls operating in the U.S. today, according to commercial real estate services firm Green Street Advisors. A large majority of those malls are classified as so-called B-, C- and D-rated malls, meaning they bring in fewer sales per square foot than an A mall. An A++ mall could bring in as much as $1,000 in sales per square foot, for example, while a C+ mall does about $320.
Macy’s Chief Executive Jeff Gennette had previously said the company was still betting on the best malls in the country, but that it would look to grow off-mall in the future.
In November, Macy’s reported a quarterly same-store sales decline of more than 20%, as consumers cut back their spending on clothes and accessories at the mall during the Covid pandemic. Digital sales grew 27%, but those gains weren’t enough to offset losses at its stores.
That trend showed up across the retail industry during the holidays. Shopper visits to brick-and-mortar stores fell 33% year over year for the six-week holiday period, according to Sensormatic Solutions, which tracks footsteps with cameras. That came in below Sensormatic’s initial projection that traffic would fall 22% to 25%.
Macy’s has been trying to stay afloat in a tumultuous retail environment. More than three dozen retail companies including J.C. Penney, Neiman Marcus and Lord & Taylor filed for bankruptcy protection in 2020, as consumers have increasingly been steering clear of department stores in particular.
A list of the roughly 45 Macy’s locations slated to close could not immediately be obtained by CNBC. Liquidation sales have already started at some locations, and the rest are slated to start later this month.
Macy’s operates 544 of its namesake department stores, along with 34 Bloomingdale’s locations, 19 Bloomingdale’s outlets and 166 Bluemercury shops, according to its website.