Macy's shuttering 35 to 40 stores

New York - Macy's will be shuttering 35 to 40 underperforming stores as they work to reform their omnichannel approach. These closures will result in a reduction of 5 percent of their stores. While they have yet to announce which stores will be closed, the expected closures have an estimated revenue of 300 million dollars combined.

Terry Lundgren, Macy’s Chairman and CEO, was quoted saying to WWD: “Physical stores remain absolutely vital to our omnichannel strategy, which provides local touchpoints and tailored merchandise assortments for shoppers in nearly every major market. As new shopping centers are opened, however, many customers change their shopping habits and often the sales volume of a store gets divided among the new and nearby, existing centers.”

Macy's closing underperforming stores

Employees at the stores that will be closed could potentially be offered positions at nearby Macy's locations, and employees who are laid off will receive severance pay. While it might seem like Macy's is struggling, the company tends to close a few underperforming stores every year. The idea is that they can focus more on high-performing locations versus trying to save underperforming stores.

Macy's runs 770 stores, and has closed 52 locations over the last 5 years, while opening 12. The company is expected to open six of their off-price Macy's Backstage locations later this year with more store openings to follow in 2016. Macy's has actually been hurt by the increased strength of the U.S. dollar because it is causing tourists to spend less.

The specific locations that will be closed will be announced at a later date. In 2014, the company reported 28.11 billion dollars in revenue, up less than 1 percent from 2013.