As retailers continue to struggle, Macy’s is closing 28 stores

Strange as it may sound, Macy’s stock is soaring after the company reported sales results for the critical November/December holiday period on Wednesday.

After reporting that same-store sales had declined 0.7 percent over the year, reports USA Today, CEO Jeff Gennette said in a news release, “Macy’s, Inc.’s performance during the holiday season reflected a strong trend improvement from the third quarter,” adding, “Additionally, customers responded to our gifting assortment and marketing strategy, particularly in the 10 days before Christmas.”

Macy’s has had it tough this year, with stocks down 43 percent over the previous year. But stocks have risen 20 percent over the past three months as of Tuesday’s closing price, according to Barron’s. And the 0.7 percent November and December decline was not as bad as had been predicted.

However, despite the seeming “turn-around” in business, Macy’s is still looking to close underperforming stores. Gennette said that the company’s holiday sales benefited from strong online sales and demand for gift products, and the lower sales were “steeper than we expected.”

Macy’s Herald Square, the flagship store of Macy’s: 151 West 34th Street on Herald Square in Midtown Manhattan, New York City. Built in 1901 and also known as the R. H. Macy and Company Store.

Arild Vågen (CC BY-SA 4.0)

The big-name department stores are being squeezed out by discount chains, like TJ Maxx and Target, which is pressuring profits and forcing them to put products on sale. This environment has forced retailers like Sears, Forever 21, Pier 1 Imports and others into fighting for their lives.

Last year, U.S. retailers announced 9,302 store closings, a 59 percent jump from 2018 and the highest number since Coresight Research began tracking the data in 2012. As a matter of fact, Coresight lists 729 store closures to date so far in 2020.

Macy’s says it will provide a full list of its store closures at its upcoming investor day on February 5. For now, we know the Bloomingdales in The Falls mall, which is southwest of Miami, is closing.

Neil Saunders, the managing director of GlobalData Retail, in a statement sent to USA Today, said Macy’s decision to close its underperforming locations “a foretaste of things to come if Macy’s does not invest in and reinvigorate these outlets,” adding that most of Macy’s legacy stores “looked shabby and lacked festive cheer. In our view, they remain unfit for purpose and there is a big question mark over their long-term future.”