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Department store chain Macy’s plans to close 35 to 40 stores in 2016

Published 09 September 2015

Department store chain Macy’s plans to close 35 to 40 non-performing stores in early 2016, which is about 5% of its store count.

Macy's in Ohio

The department store chain stated that it would soon disclose the locations where it plans to close the stores. These locations are expected to have approximately $300m in combined revenue.

The firm has also not disclosed about the number of layoffs due to the closures.

Macy's, which has around 770 stores, has closed 52 outlets and opened only 12 since 2010.

The Cincinnati-based company has been struggling with falling revenues due to shift in consumers preferences for electronic gadgets and online experiences over the traditional department store offerings of apparel and home furnishings.

In addition, investors have been mounting pressure on the chain to make better use of its real estate.

In August, Macy's announced a $170m deal to sell a part of store in Fulton Street, Brooklyn, to Tishman Speyer, a real estate developer. It is also exploring similar deals.

Despite the closure plans, the company intends to go ahead with its plans to open six Macy's Backstage stores this fall as the chain plans to compete with players such as TJX Cos., T.J. Maxx and Marshalls. Last week, the first three Backstage outlets opened in New York City, reported The Wall Street Journal.

Meanwhile, Macy's announced that Best Buy will open 10 shops within Macy's stores in November. Currently, Macy's does not offer electronic gadgets. The 300ft2 shops will sell Samsung smartphones, tablets and smartwatches as well as accessories; however, Apple Inc.'s products will not be part of the offerings.

Image: Macy's plans to close around 40 stores. Photo: Courtesy of Hope E. Moore/ Wikipedia.