Macy’s to Shutter 150 Stores to Focus on Boosting Upscale Brands

The company will close underperforming locations while it grows its luxury Bloomingdale’s and BlueMercury outlets.

Photo of the exterior of a Macy's store
Photo by Vladan Raznatovic via Unsplash

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Macy’s flagship location in Herald Square takes up roughly an entire New York City block at more than 1 million square feet of retail space across multiple floors. And historically, most of its other locations have followed a similar pattern — lots of products in lots of space. 

There’ll be a lot less space now. 

The 165-year-old department chain plans to close 150 locations in the next three years. It’s the latest move from a legacy physical retailer as the industry navigates rapidly changing consumer habits.


Macy’s is saying its move is more strategic restructuring than strictly cost cuts:   

  • The 150 “underperforming” Macy’s locations represent 30% of the company’s footprint, but less than 10% of its sales. The plan is to shutter them and use the savings to open smaller versions of the titular store as well as launch more upscale Bloomingdale’s and BlueMercury cosmetics locations.
  • Macy’s first announced its dive into expanding new stores one-fifth the size of their traditional locations last fall. Smaller stores mean cheaper rent, fewer employees, and less inventory. But smaller stores can better cater to certain demographics, increase foot traffic, and provide more time for store reps to interact with shoppers. 

Macy’s new CEO Tony Spring told The Wall Street Journal that surveys showed shoppers want less clutter and more sales reps. “This isn’t just about shrinking,” he said. “This is about resizing the portfolio to make sure we are giving people an opportunity to shop the way they want.”

Proxy War Never Changes: Macy’s is also battling activist investors Arkhouse Management and Brigade Capital Management, which offered to buy the company for $5.8 billion and take it private. Macy’s didn’t like the valuation or the financing and rejected the deal. Arkhouse responded by nominating nine candidates to Macy’s 14-member board. With revenue, digital sales, and same-store sales falling year-over-year in the fourth quarter, Macy’s has a tough fight to keep Arkhouse out.