Macy’s wants to fix a problem.
Macy’s CFO Karen Hoguet said (via Sarah Halzack) that “this country is over stored, giving evolving customer shopping habits.”
Further, Macy’s is cutting about 100 stores.
Macy’s has 728 stores, 675 of which are full line stores.
Hoguet said on the call that this was in order to “bring the shopping experience to a consistently higher level and concentrate Macy’s stores and locations with better potential.”
In other words: Macy’s would rather have fewer, but better, stores.
After all, a recent visit to the Herald Square location revealed even the flagship is a mess.
Closing stores “is a big step and not one that we take lightly,” Hoguet said on an earnings call on Thursday morning. “We believe that it’s critical to re position the company or the future but that still doesn’t make it easy.”
The company is already looking into selling its San Francisco men’s store in Union Square.
“This store would be redeveloped for alternative use and our men’s business would be recombined into our main Union Square store.”
She said that company is looking into opportunities in other flagship stores, like Herald Square, downtown Minneapolis and the upper floors of the State Street store in Chicago.
Hoguet said that Macy’s needed “to reinvent our company,” and that the retail sector “every 5-7 years also needs to be reinvented” as a ways to respond to what customers want.
It is unclear if closing stores will salvage the business.
“Closing stores is all well and good, but alone it is not sufficient to save Macy’s. As such, we are encouraged by the fact that Macy’s sees this move as part of a wider program to reinvent itself and will direct the savings from shuttered stores into its remaining locations,” Neil Saunders, CEO of consulting firm Conlumino wrote in a note to clients. “Execution will be critical: Macy’s simply cannot afford to get this wrong or to skimp on its reinvention.”
“Retail is changing, there’s no doubt about it,” Hoguet said on the call.
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