New Strategy Announced by Macy’s to Revamp Troubled Retailer
Macy’s Downsizing and Focusing on Luxury Brands
Macy’s, the iconic American department store, has revealed a new strategy to transform the struggling retailer and adapt to the changing demands of shoppers. The company aims to revitalize its 150-year-old brand by introducing a new, smaller, and more luxurious look.
The first step in this ambitious plan is downsizing, with 150 underperforming Macy’s stores set to close. By the end of 2024, 50 stores will shut down, followed by another 100 over the next few years. The company’s investment will now prioritize its 350 core Macy’s stores by 2026, ensuring their long-term success.
Macy’s will also shift its focus to the flourishing Bloomingdale’s and Bluemercury brands, which have outperformed the Macy’s label. It plans to open more, smaller versions of these luxury stores in the coming years to meet the demands of shoppers seeking elevated shopping experiences.
Macy’s Continues Battle Against Challenges
Macy’s and the entire department store sector have grappled with significant hurdles, including the rise of e-commerce giant Amazon and the increasing strength of discount chains such as TJ Maxx. Additionally, online brands have provided stiff competition to traditional brick-and-mortar stores, pushing them to reassess their strategies.
The department store chain has faced significant setbacks, with its stock price plummeting by 75% since 2015. In an effort to adapt, Macy’s has closed nearly 300 stores to date, accounting for almost one third of its locations, while still operating around 700 stores across its various brands. Moreover, the company recently made headlines by laying off around 2,350 employees, reflecting the larger challenges faced by the retail industry.
Recognizing the urgency to combat these obstacles, Macy’s has rejected activist investors’ unsolicited $6 billion bid aimed at privatizing the beloved department store. Nevertheless, the activist group remains persistent, launching a proxy fight to seize control of Macy’s board.
Aiming for a Modern Macy’s
Newly appointed CEO Tony Spring highlighted that the company’s groundbreaking strategy, titled “A Bold New Chapter,” has received full backing from the board. Spring emphasized the importance of extensive market research and a drive to refresh the Macy’s brand.
This strategy places significant importance on enhancing Macy’s digital presence and streamlining its product offerings to provide a standout shopping experience. In response to customers’ desires, Macy’s will concentrate on brands and items that have proven appeal, while simultaneously assuring “compelling value” to its clientele.
Moving forward, Macy’s intends to prioritize sustained profit growth by opening new stores and remodeling existing locations for its luxury brands. The company envisions opening 15 new Bloomingdale’s stores, 30 new Bluemercury stores, and renovating 30 existing Bluemercury locations within the next three years.
Adapting to the Changing Retail Landscape
In recent years, as inflation soared, the retail market has witnessed a tectonic shift with lower-end stores focused on cost-savings, like Walmart, going strong. Simultaneously, luxury brands have managed to stay afloat as affluent buyers sustain their spending habits, thereby defying the impact of increased prices.
Please note that this article is a developing story and will be updated in due course.
