Macy's to close 150 unproductive namesake stores amid sales slip as it steps up luxury business

Macy's will close 150 unproductive namesake stores over the next three years including 50 within the next year, the department store operator said Tuesday after posting a fourth-quarter loss and declining sales.

As part of the strategy, Macy’s aims to upgrade its remaining 350 stores, with plans to add more salespeople to fitting areas and shoe departments, while adding more visual displays like mannequins. At the same time, the company signaled a pivot to luxury, which has fared better overall. It said it would open 15 of its higher end Bloomingdale’s stores and 30 of its luxury Bluemercury cosmetics locations.

The Macy’s stores set to close account for 25% of overall square footage but less than 10% of its sales, the company said.

Macy’s did not provide a list of planned closures, but San Francisco’s Mayor, London Breed, confirmed that the retailer’s sprawling store in the city’s Union Square downtown shopping district would be shuttered. While not among the first 50 to be closed, Breed said she was told by Macy’s that it is seeking a buyer for the San Francisco property.

There are currently eight Macy’s stores on Long Island — at Green Acres Mall in Valley Stream, Hampton Bays Plaza, Roosevelt Field in Uniondale, Smith Haven Mall in Lake Grove, South Shore Mall in Bay Shore, Sunrise Mall in Massapequa and Walt Whitman Shops in Huntington, and on Northern Boulevard in Manhasset.

There are also two Macy’s Backstage stores, which sell off-price merchandise, in New Hyde Park and Melville. A Macy’s Furniture and Mattress Gallery and a Furniture Clearance Center share a building in Carle Place, and there is a Macy’s Furniture and Mattress Gallery in Smith Haven Mall.

There are two Bloomingdale’s full-line department stores on the Island, in Roosevelt Field and Walt Whitman Shops, as well as a Bloomingdale’s Outlet at The Gallery at Westbury Plaza in Uniondale and a Furniture & Mattress Outlet at Samanea New York in Westbury.

The five Bluemercury stores on the Island are in East Hampton, Greenvale, Manhasset, Southampton and Woodbury.

While adjusted net income and revenue topped Wall Street expectations, Macy's offered a muted outlook for the year.

“We are making the necessary moves to reinvigorate relationships with our customers through improved shopping experiences, relevant assortments and compelling value,” said Macy’s CEO Tony Spring, former CEO of Bloomingdale's who succeeded Jeff Gennette earlier this month.

The plans come as the department store chain faces a proxy fight from Arkhouse Management which nominated a slate of nine directors for election to Macy's board last week. Last month, Macy's rejected a $5.8 billion takeover offer from the hedge fund and Brigade Capital Management, an investment manager.

Activist investors and pressure to increase sales are just two critical issues facing the new CEO.

Macy’s is maneuvering to shore up sales by accelerating the expansion of small-format stores that can provide more convenience to its customers. It announced plans in October to add up to 30 small-format locations through the fall of 2025, bringing the total number to roughly 42. The next round of expansion starts in the fall.

Yet Macy's is still cutting jobs to lower costs. In January, Macy's said it would trim about 3.5% of its total workforce, roughly 2,350 employees, and close five locations. Spring told The Associated Press during a phone interview that he didn't have an estimated number of workers impacted since the closures will happen over a three-year period.

Spring told analysts the retailer still believes in its physical footprint.

“We believe in stores,” he said. “We have to focus on making sure that we have the best stores, not the largest number of stores."

With Tory N. Parrish