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Macy’s Inc. is undergoing a business transformation that includes thousands of job cuts and 125 store closures over the next three years. About 30 of the stores have already been designated to be closed.
This three-year “Polaris strategy” aims to streamline the department store retailer’s fleet of stores in favor of those that have undergone the “Growth treatment,” a revamp that includes store remodels and technology improvements.
Read: Macy’s stores at risk of closing drive an average of 80% less sales than ‘Growth’ stores: JPMorgan
“It’s sad for the communities that now have a lot of empty real estate in their malls, the landlords stuck with those malls and the employees who will lose their jobs,” said Sucharita Kodali, principal analyst at Forrester.
Still, she thinks the downsizing is the right thing for Macy’s: “Half of revenue only comes from 150 ‘magnet’ stores so it’s doing what it needs to do.”
Macy’s had a total 871 stores as of the end of the third quarter of 2019 ended in October, made up of 636 Macy’s stores, 171 Bluemercury stores, 37 Bloomingdale’s stores, 19 Bloomingdale’s The Outlet stores and 7 Backstage stores.
Bank of America analysts say the Polaris program, which sounds like a dramatic shift, could actually end up being conservative if it goes according to plan.
“However, we worry about execution risks, especially with the number of customer-facing initiatives taking place in a short period,” analysts wrote.
Bank of America rates Macy’s stock underperform with a $12 price objective.
Here’s a list of the stores that are set to close this year:
|California||Antioch||Somersville Towne Center|
|California||San Diego||Horton Plaza Park|
|Florida||Miami||The Falls Mall (Bloomingdale’s)|
|Florida||Pompano Beach||Pompano Citi Centre|
|Florida||Sanford||Seminole Towne Center|
|Florida||Vero Beach||Indian River Mall|
|Georgia||Decatur||The Gallery at South DeKalb|
|Hawaii||Waikoloa Village||Kings’ Shops|
|Idaho||Lewiston||Lewiston Center Mall|
|Illinois||West Dundee||Spring Hill Mall|
|Kentucky||Owensboro||Towne Square Mall|
|Maryland||Salisbury||The Centre at Salisbury|
|Massachusetts||Leominster||The Mall at Whitney Field|
|Montana||Helena||Helena Northside Center|
|New York||Hicksville||Broadway Commons|
|North Carolina||Winston-Salem||Hanes Mall|
|Ohio||St. Clairsville||Ohio Valley Mall|
|Pennsylvania||Harrisburg||Harrisburg East Mall|
|Pennsylvania||State College||Nittany Mall|
|Macy’s Inc., The Wall Street Journal|
Macy’s stock has tumbled 33% over the past 12 months through morning trading Thursday, while the SPDR S&P Retail exchange-traded fund XRT, -0.37% has edged up 0.3% and the S&P 500 index SPX, +0.25% has climbed 22%.
–Tomi Kilgore contributed to this report.