Macy’s Will Close 68 Stores, Cut 10,000 Jobs
Last August, retail standard-bearer Macy’s announced its plans to close up to 100 of its retail locations in the coming years. Yesterday, the company announced exactly which stores from that list would close in 2017. This announcement came after a less-than-favorable holiday sales report punctuated the need for the company to rethink its retail strategy.
Which Stores Are Closing?
The big news that comes from Macy’s press release yesterday is not that stores are closing, but which stores are closing. The company released a new list of over 60 locations on the chopping block in 2017. You can read the full list here.
Among the most notable closings is the Downtown Minneapolis location. With over 1.2 million square feet of retail space and over 280 associates, this is by far the largest cut. The building, which used to be Dillard’s, has been a retail staple for over a century. Macy’s acquired the space in 2005.
Other significant closures include:
- University Square, Tampa, FL – in operation since 1974
- Moorestown, Moorestown, NJ
- The Marketplace, Rochester, NY
- West Oaks Mall, Houston, TX
- Collin Creek, Plano, TX
- Landmark, Alexandria, VA
Layoffs and Restructuring
Macy’s estimates that their store closures will displace some 3,900 retail associates. In some cases, associates will have the option to move to another location nearby, but most will simply receive severance (if qualified). However, retail layoffs are only the start of Macy’s plan, which is designed to save them some $550 million per year.
In addition, Macy’s plans to restructure its administrative arm. As a result, they plan to cut some 6,200 jobs at the managerial level and above.
Brick-and-Mortar Retail Is Dead
Macy’s announcement yesterday came as no surprise, since it is part of a broader paring down strategy that the company implemented months ago. However, its significance is far greater than a simple announcement regarding empty buildings and people losing their jobs.
Macy’s newest headline is just one in a number of headlines that we should expect to see from it and similar companies in 2017. The reality is eCommerce is the dominant form of shopping today. We are indeed witnessing the death of traditional brick-and-mortar retail stores and Macy’s, like other traditional retailers, is struggling to keep up with the likes of Amazon, Jet, and other all-digital brands.
As a result, Macy’s focus will be to divert investment money to eMarketing efforts. At the same time, it will boost its investment in smaller enterprises like Macy’s Backstage and the Bluemercury lines. Finally, the company plans to continue to invest in Chinese operations and has planned to open two new stores internationally, one in Abu Dhabi, UAE and one in Kuwait, in 2017.