Macy's to close another 100 stores

Macy's has disclosed that sales at their department stores open at least one year declined 2 percent. As a result, they will be realigning their business to cater to an omnichannel consumer, and they will also be closing 100 stores.

The closures, which represent 17 percent of the company's portfolio, will take place in the early part of 2017, with the remainder shuttering as leases and operating covenants expire or are amended or waived. In several cases, the value of of the real estate exceeds the value of the retail space resulting in their closure. Specific locations will be revealed at a later date. It has not been learned how many jobs will be lost in the process.

Associates who have been displaced by the closing may be offered positions at nearby locations with full-time and part-time benefits. Those who are laid off will be offered severance benefits.

Macy's announces 100 store closures

"Nearly all of the stores to be closed are cashflow positive today, but their volume and profitability in most cases have been declining steadily in recent years. We recognize that these locations do not yield an adequate return on investment and often do not represent a customer shopping experience that reflects our aspirations for the Macy's brand," said Jeff Gennette, president of Macy's Inc., in a statement. "We decided to close a large number of stores proactively so we can invest in a winning customer service experience in our most productive and highest-potential locations, as well as invest in our growth sooner and more aggressively in digital and mobile."

According to Macy's, the combined annual sales volume of the 100 locations is expected to be around 1 billion dollars, which includes the net of sales and online. The reduction in EBIDTA will be offset by savings beyond those associated with the closings.

In the meantime, Macy's has plans to improve both their online and offline store presence. They have plans to launch new vendors shops in store through licensing agreements and increasing the staff numbers for the My Stylist personal shopping service. The company will also be investing in its apps and website to improve natural language search.

Photo: Herald Square Flagship New York, NY. Credit: Macy's