August 16, 2016
One of the most venerable brands in retail, and a pioneer of the modern in-store shopping experience, will close the door on many of its physical locations and turn its attention to e-commerce and omnichannel efforts. At its second-quarter earnings call late last week, Macy’s announced it was closing 100 locations so it could devote more resources to meeting changing consumer demands regarding how they like to shop. One hundred locations represents about 15 percent of the stores Macy’s currently operates.
“The announcements we are making today represent an advancement in our thinking on the role of stores, the quality of the shopping experience we will deliver, and how and where we reinvest in our business for growth. In the short term, our company’s topline sales will be somewhat smaller, but the changes being made will position us to grow comparable sales more quickly and generate a level of profitability that stands out among retailers,” said Jeff Gennette, president of Macy’s, Inc. “We will continue to carefully analyze consumer shopping patterns and trends, and use data and customer insights as the basis for innovations to drive the business. You can look forward to a company that expedites decision-making, moves faster, and is bolder in its approach to the customer.”
Wall Street swiftly registered its approval of the move. Shares of the retailer surged 17 percent immediately after Thursday’s announcement. News of Macy’s online emphasis came a day ahead of a Department of Commerce report that showed e-commerce as one of the only bright spots in a flat month of July for retail sales in the U.S. Non-store retail sales grew 1.3 percent compared to June.