NEW YORK — Coming fresh off the announcement that the company is shuttering four full-line store locations, Macy’s CEO Jeff Gennette says the retailer is in the last stages of closing underperforming locations.
“When you think about the Macy’s portfolio of stores, up until two and a half years ago we were only on-mall, and we had been closing underproductive units. Since 2016 we dropped 170 stores,” Gennette said on Sunday to an audience at the National Retail Federation’s Big Show conference in New York City. “We are in the final stretch of that.”
Closing full-line stores across the country has been part of Macy’s turnaround strategy. The retailer is also diversifying its store fleet with off-mall locations.
“The last two years — this year and then last year …. we had dramatically less square footage, because the stores that we’re opening off-mall are much smaller than the ones that are on-mall,” Gennette said.
Its Bloomingdale’s concept store, Bloomie’s, has a smaller footprint and is focused on an edited collection, technological touches and omnichannel services. A Bloomie’s location opened in Fairfax, Virginia, in 2021, a second location opened in Chicago over the fall and a third will launch in Seattle in the spring of this year.
The department store has also been opening Market by Macy’s, which are located in shopping centers and carry a curated assortment of products that are tailored to the local community. The stores, which were introduced in 2020, range in size from 25,000 to 50,000 square feet (compared to roughly 185,000 square feet for anchor stores), and boast conversion rates that are generally higher than full-line stores.
“The board and I are looking at — we have right now eight Market by Macy’s, we’ve got two Bloomie’s, we’ve got a slew that are coming in the pipeline that we haven’t announced yet,” Gennette said.
Moreover, opening brick-and-mortar locations ultimately works in tandem with Macy’s digital strategy, according to Gennette. “There is just this kind of irrefutable truth that brick and mortar seeds digital activity. Customers really do want to have the option of shopping in the zip codes that they live. And where we have a store, our penetration online is significantly higher. When we close the store, it drops significantly.”
Macy’s is also engaging in a replacement strategy with some of its stores. The company recently decided to close its full-line store at Chesterfield Mall in St. Louis, Missouri, and open a Market by Macy’s in a nearby location.
“Chesterfield Mall used to be a premium mall back in the ‘80s. But it’s been decaying and dying for years and we were the last known brand standing in that mall. It was only a matter of time,” Gennette said. “Still cashflow positive, but it was time for us to close it.”
As the company looks to its different formats, though, ensuring the ability to scale is at the forefront of its strategy.
“We want to have a scalable model,” Gennette said.
via https://www.aiupnow.com
Kaarin Vembar, Khareem Sudlow
