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article imageMacy's to close 100 stores while boosting online presence

By Nathan Salant     Aug 12, 2016 in Business
New York - Macy's, the largest U.S. department store chain, announced plans Thursday to close 100 stores across the country and reallocate resources to increase its online presence.
The company, which also owns the more-upscale Bloomingdale's chain, has been experiencing falling sales and profits at its nearly 900 stores nationwide, including its Bloomingdale's locations.
The planned closures, which begin in January, represent 14 percent of Macy's stores, and are expected to include the company's high-profile men's store on Stockton Street in San Francisco's Union Square., according to the Associated Press.
The men's store is expected to be sold and its inventory combined with the chain's larger store around the corner on Geary Street.
"The announcements we are making today represent an advancement in our thinking on the role of the stores, the quality of the shopping experience we will deliver, and how and where we reinvest in our business for growth," said Macy's President Jeff Gennette, who is slated to succeed Terry J. Lundgren as CEO next year.
Macy's, which flourished during the Great Recession, is now believed to be suffering from increased competition from fast-fashion retailers like H&M, discounters like T.J. Maxx and online giant Amazon.com.
Amazon is reportedly poised to surpass Macy's as the largest online clothing seller next year, the AP said.
But Macy's said its revised strategy included growing exclusive product lines and prioritizing investments in stores with growth potential.
Macy's closed 40 stores earlier this year, the AP said.
But Macy's reported Thursday that sales and profits had fallen in the second quarter, despite the chain's efforts to reverse that trend.
Macy's has purchased upscale beauty product retailer Bluemercury and opened its own chain of discount stores, Macy's Backstage, in recent years.
The store closures announced Thursday, which were not specified, have net sales of $1 billion, the AP said.
But Macy's appears to be taking seriously pressure from some of its investors to begin selling its stores, which are themselves valuable but may sit on even more valuable real estate.
CFO Karen Hoquet told analysts Thursday that the company is negotiating with potential buyers of its San Francisco men's store, and has also been considering offers for its flagship Herald Square location in New York City and its stores in downtown Minneapolis and on State Street in Chicago, the AP said.
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