Macy's to close 125 stores; fate of Michigan's 14 locations unclear
Macy's will close 125 more stores nationwide, cut roughly 2,000 jobs and abandon a second headquarters in Cincinnati as part of an effort to save $1.5 billion per year starting by the end of 2022, the retailer confirmed Tuesday.
Macy's, which operates 14 stores in Michigan, expects to save $600 million in 2020. The company did not say which locations in the United States would close.
The retailer said it plans to cut those stores in "lower-tier malls." It would also establish a single corporate headquarters, abandon its second headquarters in the southwest Ohio city and relocate digital business to New York City.
"We have a clear vision of where Macy’s Inc. and our brands, Macy’s, Bloomingdale’s and Bluemercury, fit into retail today," Jeff Gennette, CEO of Macy’s, said in a statement. "We are confident in our Polaris strategy, and we have the resources required to return Macy’s Inc. to sustainable, profitable growth. We will focus our resources on the healthy parts of our business, directly address the unhealthy parts of the business and explore new revenue streams."
He continued: "Over the past three years, we have shown we can grow the top-line; however, we have significant work to do to improve the bottom-line. We are confident the strategy we are announcing today will allow us to stabilize margin in 2020 and set the foundation for sustainable, profitable growth."
The company said it has completed a "rigorous evaluation of Macy's store portfolio." The 125 stores to close include roughly 30 that are currently doing so under a process announced earlier this year. It did not include any Michigan locations. Macy's estimates those stores account for $1.4 billion in annual sales.
"Our customers expect convenience and a tailored experience across all channels," Gennette said. "We have an opportunity to build a broader yet integrated Macy’s experience within a metropolitan area by investing in our magnet stores, building freestanding Backstage locations and testing new, off-mall store formats. The more convenient, brand-right touchpoints we have, the greater loyalty and engagement we engender. This will enable us to grow with the next generation of American shoppers."
The company also plans to upgrade 100 stores in 2020, launch a new phase of its customer loyalty program and push to boost online sales. The company is also planning new "Market by Macy's" stores, which sell food and beverages in addition to merchandise and local goods.
The job cuts will come to the corporate and support function positions. In addition to closing its Cincinnati headquarters, the company will close its San Francisco and Lorain, Ohio, offices. The company will also close a customer contact center in Tempe, Arizona. The retailer will report fourth quarter and full-year earnings on Feb. 25.