Department store giant Macy’s sent shockwaves through the retail industry yet again by announcing that they will be closing even more stores. As reported by USA Today, 100 stores are on the chopping block this time as the venerable retailer continues to downsize its footprint in a bid to right the ship.
The latest round of closings are part of the company’s overall efforts to position itself for further growth in the future. Declining profits, a changing retail landscape and increased competition from online competitors have all lent a hand in Macy’s decision making, and the company is attempting to be proactive by altering its current footprint.
“The reality is the United States is over-stored. It’s pure facts. We’re getting in front of what we know is a trend that’s been occurring and that is customers are balancing their spending with online as well as in stores.” Macy’s CEO Terry Lundgren said.
In addition to the store closings, Macy’s announced plans to ramp up efforts in the areas of online search, bringing more brand shops within its stores, and hosting more in-store events in a bid to improve customer counts.
“We decided to close a larger number of stores proactively so we can invest in a winning customer experience in our most productive and highest-potential locations,” Macy’s President Jeff Gennette said in a statement.
Reaction from analysts was mixed overall, but those who are singularly focused on the retailer’s bottom line view it as a positive development.
For those with a perspective that expands beyond the financial statements and share price, the announcement struck a bit of a more personal chord. As a bellwether of the retail industry, the announcement of additional store closings – not too long after the announcement of additional closings earlier this year – sends a jolt to the retail sector as whole.
While it may be a positive development for the company’s long-term profitability and viability, it sends another clear signal that the retail landscape is changing dramatically before our eyes. Additionally, it provides one more area of concern for property managers and landlords that are dealing with their own concerns on how to fill up space and remain viable. In short, what may be good news for shareholders and analysts doesn’t translate into the planning of a huge celebration for the retail sector.
