Macy’s, the iconic department store of the American middle class known for its Thanksgiving parade every year, has declared a massive store clearance.
Macy’s new chief executive Tony Spring announced on the 27th local time that it would close 150 stores, or 30% of all stores, over the next three years on a sub-sales basis.
As a result, Macy’s will first clean up 50 stores by the end of this year, and by 2026, the total number of stores will remain at only 350.
Macy’s instead plans to open new small stores focused on its expensive luxury range and expand its well-performing Bloomingdale’s and Blue Mercury businesses.
Macy’s plans to set up a separate 30 small stores over the next two years, avoiding the way it will enter existing large malls.
“This is not a contraction of the business,” said Spring, who took office earlier this month, “and it’s a restructuring of the business portfolio and we want to provide the shopping opportunities that consumers want more.”
The Wall Street Journal (WSJ) noted that “many department store chains are undergoing similar types of restructuring due to problems with their profit structure.”
In fact, the decades-long polarization of the consumer market through the pandemic is becoming more evident in the United States.
For this reason, in one axis, the low-end market, which places price as an advantage, like Walmart, is growing in size, while the high-end luxury market, which targets consumers with high-priced products, is growing in size.
“Macy’s and other department store industries have faced the rise of the Internet market such as Amazon in recent years and simultaneous pressure from discount stores such as TJ Max,” CNN reported. “Macy’s shares have fallen 75% since peaking at $73 per share in 2015.
Macy’s has already closed more than 300 stores, or one-third of all stores.
Macy’s previously announced restructuring of 2,350 employees and closing five stores ahead of Spring’s inauguration last month.
Memories of department stores we shared as children will disappear and the Internet market will become the center of the society.
SALLY LEE
US ASIA JOURNAL
